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Standard & Poor's Ratings Services said today it raised its long-term
foreign currency ratings on the Republic of Romania to 'BB' from
'BB-', and its long-term local currency ratings to 'BB+' from 'BB'. At
the same time, Standard & Poor's affirmed its 'B' foreign and local
currency short-term ratings on Romania. The outlook remains positive.
"The upgrade reflects the strong competitiveness of the Romanian
economy," said Standard & Poor's credit analyst Helena Hessel.
"Ongoing restructuring and modernization are underpinning continued
robust growth driven by exports and investment." Despite low growth in
the EU and a drought earlier this year, Romania is expected to post
real GDP growth of at least 4.5% in 2003. The industrial base is being
modernized, the banking system has recently strengthened, and the
restructuring of the inefficient energy sector is proceeding, albeit
at a slow pace. This should support robust GDP growth in the medium
term, and facilitate integration within the EU, with accession
expected in 2007. "The economy has also benefited from strong fiscal
and monetary policies," Ms. Hessel added. "In particular, the central
bank's recent resolute policy on interest rates insulated Romania from
balance-of-payments pressures." Despite a strong export performance,
the current account deficit widened significantly in the first half of
the 2003, reflecting a surge in imports stimulated by an earlier cut
in interest rates, as well as high wage increases. The swift
tightening of monetary policy after several months of loosening helped
to reverse the build-up of external pressures at an early stage.
Official foreign exchange reserves continued to grow in the first
eight months of the 2003, to $6.6 billion in August up from $6.0
billion at year-end 2002. As a result, Romania's external liquidity
and solvency ratios remain strong. Strong vested interests, patronage,
and corruption still pose some risk and, at times, undermine Romania's
image among foreign investors. These issues also cloud the country's
relations with multilateral organizations. Structural reforms have
progressed, although more slowly than advocated by the IMF, reflecting
weak investor interest and political hindrances. Nevertheless, some
important privatizations have moved forward, alongside other
restructuring and adjustment measures in line with EU accession
requirements. Achieving further disinflation remains a challenge.
Inflation has remained on a downward trend this year, but is estimated
at a still high 14.5% for year-end 2003. The pace of disinflation was
slowed by necessary public sector price increases and a drought.
Further progress will be made easier if income policies are applied
more successfully and evenly across loss-making government-owned
companies. "In Standard & Poor's opinion, the prospects for sustained
restructuring and modernization of the economy during the next several
years are good," said Ms. Hessel. "The ratings could be raised further
within the next couple of years if financial discipline and structural
reforms continue."
The value of the investments to be made in the development of the transport and
housing infrastructure in Romania will rise to nearly three percent of GDP
in 2004, compared to 2-2.2 percent in the past two years, Minister of
Transports, Constructions and Tourism, Miron Mitrea said. During a press
conference held at the PSD Headquarters Minister Mitrea said that the value of
the investments to be made is limited both by the absence of funds and by our
country's commitment to the IMF to maintain the budgetary deficit within the
established limits. The Minister added that Romania has the possibility to
obtain the necessary money from the international financial institutions, from
ISPA or SAPARD European grants, or by engaging commercial credits. Minister
Mitrea mentioned the priorities for the upcoming year: to finalize at least two
segments of the Bucharest - Constanta highway, to complete the Bucharest -
Brasov highway, to finalize at least half of Bucharest's bypasses and to repair
at least the lanes in one direction of Bucharest - Pitesti highway. In the
constructions industry, sports halls will be financed by the state budget as
well as by a loan granted by the Development Bank of the Council of Europe.
Resources for the construction of dwellings to be rented to youth are also
sought. As many as 25 sports halls are finished by now, while another 376 halls
are under construction, 176 of which will be completed this year. Another 5
halls are under contract and another 10 are proposed for funding. In the housing
sector, 18,197 houses were under construction this year, of which 14,534 were
commissioned. Most of them, i.e. 482, were commissioned in Dambovita county,
while in Brasov, Galati and Ilfov counties, no houses were commissioned as a
result of bad cooperation with local authorities. Under the national road
rehabilitation program, some 1,500 km of roads were rehabilitated in the last
two years, as compared to the 1,307 km repaired over 1993-2002.
The income and profit tax rate should converge to 20% by the accession date,
according to Maria Manolescu, state secretary within the Finance Ministry.
The profit tax rate is currently 25% while the authorities plan to introduce a
23% flat income tax rate as of next year to replace the progressive taxation
system. The decline in fiscal revenues prompted by a 20% tax rate for profits
and incomes will be offset by higher tax rates charged on dividends, Manolescu
explained; she pointed at a 15% rate. Currently, the dividend revenues are taxed
by 5% for individuals and 10% for firms. Regarding the VAT rate, the 19% current
rate should be maintained, but Manolescu mentioned that preferential rates are
to be enforced as soon as next year for some goods as medicines, tourism
services and certain cultural activities (9%). Manolescu mentioned that the
Fiscal Code stipulating the taxation strategy for the following year is to be
debated in government within perhaps a couple of weeks, after having been
debated with the social partners (trade unions and employers' associations).
This week the Transportation Ministry sold in auction 11 units separated from
the railway company (CFR, CFR Marfa and CFR Calatori) for a total of EUR
6.5mn, EUR 3.2mn more than the initial price, reports Bursa daily. The ministry
intended to sell 22 units. The remaining 11 units are to be put up again for
sale in an auction on Sept 29. The sale of CFR units is part of the
restructuring process carried in the railway sector. During the process, some
16,000-19,000 employees are to be made redundant, more than 5,000 of them from
the privatized units. Novamedia European Gaming & Lottery Files: "Romania", by Rob
van der Gaast Nicolae Sfetcu started some years ago with its own business on Internet, first as a freelancer specialized in web design, translation and Internet marketing and, beginning with last year, he set up his own company, Multimedia SRL. The internet maverick and this year’s award winner of the prestigious ‘Business Initiative Directions, WQC International Star Award, Gold Category Paris 2003’ tells his story in how he started his internet imperium and his internet casino www.danubecasino.com: “The beginning of the history of the Danube Casino can be located long time ago, and it is quite interesting, I think. When I was a student, about twenty years ago, I started to like two games: poker, and bridge. They were very pleasant days those days. During those years I became one of the best specialists in poker and bridge; I have never considered that poker, as well as bridge, are games, because in games you need luck, but for bridge or poker the luck plays a secondary role. I can write many books about the rituals of the nights spent playing these games, with many spectators behind us and that ended every time with a party organized by the winner. It was then when I started not to sleep the nights, and I kept this habit till our days, even if, for different reasons.” “In those years I became one of the first presidents of a bridge club in Romania, but after I graduated from college I finished playing games, too.” “I specialized in Internet business services. So, helped by my previous experience in Internet marketing, and being advantaged by the fact that I know very well the psychology of the gamblers, I had some successful marketing campaign for online casinos and affiliates that want to promote their own sponsored links through their websites or advertisements in my own network. I have to tell you that I developed, in time, one of the most complex Romanian integrated network of Internet resources for advertising and dissemination of information, named Teleactivities Network, that includes thousands of websites, web forums, directories and links, mailing lists and newsletters, e-zines, webrings, a.s.o. After such a marketing campaign, it was one of my customer that gave me the idea to imply more directly in the online gambling worlds. I already had my own gambling portal, www.online-casinos.ro. So I thought of starting my own online casino Danube Casino. Why this name? Because all my life I enjoyed the neighborhood of Danube and its beautiful landscapes. You can consider this name as an act of fealty for this river (I dedicated it a whole section in my website for the county where I live, Mehedinti”. The first Romanian online casino was launched on June 25th, 2003. Danube Casino has as partner Windows Casino, one of the top 10 online casinos in the world, legally licensed and fully insured, certified by Safe Bet and approved by Electronic Gaming Commission. Windows Casino is the winner of numerous international prizes, including Online Gaming Awards 2002, for: Best Video Poker, Best Blackjack, Fairest Casino, Best Promotions, Best Online Casino. Danube Casino offers over 125 different games (roulette, blackjack, poker, slots, video poker, baccarat, craps, etc.), according to the European and American standards. The gamblers have the possibility, besides the regular prizes, to obtain extra prizes, too, consisting in a trip to Monte Carlo, a brand new Ferrari, or other promotional materials. In order to be able to play online, first, a deposit in the casino count has to be made. All transactions are in USD. Payments can be made either by credit cards, or through specialized services for the online processing of the money (NETeller, Firepay, Stormpay, Western Union, etc.). The gamblers that reach the Danube Casino site have the possibility to be informed on the best game ways and strategies, but also learn the rules of the games by appealing to the casino games guides. Multimedia SRL and Windows Casino assure the technical support 24 hours a day, 7 days a week. There are specific Romanian laws for gambling, however none makes special references to online gambling. |
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