Romania Told to Amend Privatisation Law

Romania has until the end of the year to change its privatisation law or face an investigation and possible impeachment by the European Commission, according to media reports.

The business publication Profit.ro has reported that the centre-left government of Prime Minister Victor Ponta has to change the law as it includes provision that could represent state aid.

The Commission considers that provisions such as debt payment exemptions, special administration, rescheduling and asset transfers could represent measures that favour state-owned companies against their competitors.

The government has admitted seeing state-owned companies as a lever to intervene to adjust the market and achieve social objectives.

Romania is running late with planned privatisations and the restructuring of several state-run companies, mainly in the energy and rail transport sectors.

The latest European Commission report on Romania says that out of the 20 companies selected for minority or majority privatisation or liquidation, 11 procedures are still pending.

Only one majority privatisation procedure has been completed out of of 13 companies.