Romania Launches Drive to Partially Privatise State-Owned Firms

Govt must repeal ban on share sales

According to finance ministry data, the Romanian state owns 208 companies, of which 67 were loss-making as of September 30, 2020. Their combined net losses amounted to 1.97 billion lei or more than 400 million euros in the first nine months of last year. Some 54 had debts amounting to 3.92 billion lei, or more than 800 million euros.

Speaking in a radio interview on January 14, Citu, of the National Liberal Party, PNL, stressed the need for investment in order to modernise and develop state-run enterprises.

"We don't have the resources in our budget to capitalise these companies," he said, and explained his plan to list state companies on the stock exchange, so "part of their shares are transferred to other shareholders in exchange for this capital."

To move ahead, however, Citu's coalition government needs parliament - where it holds a majority - to repeal a law passed last year when the Social Democrats dominated the assembly and which installed a two-year moratorium on the sale of any shares in state-owned enterprises.

The necessary draft legislation was finalised by the government on Wednesday and will now be submitted to parliament for a vote.

The PSD's last term in office, 2017-2019, was characterised by a string of what critics said were populist measures such as unprecedented hikes in public sector wages and pensions that helped spur growth but at the expense of the budget deficit.

Nutu called the PSD ban on the sale of shares "populist" electioneering.

She said the government should look at selling stakes in unprofitable public enterprises, and highlighted the success of earlier sell-offs such as that of petrol company Petrom in 2004, when Austria's OMV took a...