ROMANIA’S PREMIER BUSINESS WEEKLY JUNE 9 - 15, 2014 / VOLUME 18, NUMBER 21

INTERVIEW: Nuclearelectrica is in talks with several parties abouttheir potential involvement in the construction of two nuclear reac-tors at Cernavoda, which requires an investment of EUR 6.2 bln, according to Daniela Lulache, GM of the nuclear producer »page 11

NEWS

Could do betterRomania still needsextensive reforms inall main sectors of theeconomy, said the ECin its annual recommendations tomember states» page 4

NEWS

Snap moveSeveral internationalcompanies, includingmost recently cerealmaker Kellogg’s, haveannounced plans torelocate operations toRomania» page 6

Romania’s large energy projects have failed to hook

investors, while the unstable legal framework is putting

the brakes on the government’s efforts to attract

backers for projects designed to secure the national

energy supply in the coming decades » page 10

PROPERTYA NEW REAL ESTATECYCLE BEGAN INTHE MIDDLE OF 2013AND SHOULD PEAKIN 2017 OR 2018,ATTENDEES HEARDDURING THE 13THEDITION OF REALTY,THE BR EVENT ON LOCAL REAL ESTATE » PAGE 8

BIG PROJECTS LACKING ENERGY

NEW S 3www.business-review.eu Business Review | June 9 - 15, 2014

NEWS in briefNEW S 3

BANKINGFinancial Supervision Authority to cut 35 percent of management rolesThe number of leadership positionsin the Financial Supervisory Authority(FSA) will be reduced by 35 percent,from 161 to 104 employees, after anew management scheme is intro-duced, according to officials. The movewill not affect the total number ofemployees, which stood at 597 at theend of May. The FSA says that intro-ducing the new personnel scheme willbe a longer process, based on legal re-quirements and a collective work con-tract.

BCR consumer loans up 70 percent in first 5 monthsRomania’s largest bank Banca Com-erciala Romana (BCR) granted over65,000 consumer loans in the firstfive months of 2014, up 70 percentyear-on-year, reports Mediafax. Overall,50 percent of the lines of credit tookthe form of personal loans, with therest credit card borrowing and over-drafts. The average value of a personalloan increased by 30 percent.

Banks’ exposure to Hidroelectrica down 72 percent to EUR 234 mln over two yearsState-owned Hidroelectrica, the hy-droelectricity producer, has reducedthe sums it owes to creditors by 64percent to RON 1.45 million (EUR 330million) since going into administrationin June 2012. In addition, the bankingsector’s exposure to the company hasfallen dramatically in the past twoyears, from EUR 841 million to EUR231 million at the end of last month.The company said it was able to repayseveral loans in full because its rev-enues had risen by RON 700 million(EUR 159 million) to over RON 3.1 bil-lion (EUR 705 million) at the end oflast year.

ENERGYRomania set to enforce different royalties for onshoreand offshore depositsThe government is working closelywith the World Bank on drawing up anew system for oil and gas royaltiesthat will provide differentiated ratesfor onshore and offshore projects, saidPrime Minister Victor Ponta, quotedby Agerpres newswire, last week. ThePM added that the country would rollout a new petroleum law next year,

including the redesigned royalties sys-tem

FINANCEMinistry of Finance plans to enhance online communica-tion with taxpayersA draft bill published by the Ministryof Finance last Monday includes pro-visions aimed at improving the rela-tionship between taxpayers and taxcollection agency ANAF, by cuttingred tape and moving some of the op-erations online. The publishing offiscal administrative documents andother procedural documents such asnotifications will also be made possibleelectronically, under the draft bill. Inaddition, ANAF can submit documentspertaining to taxpayers to other insti-tutions electronically if requested.Consequently, taxpayers should spendless time moving documents betweenvarious public bodies. Last year, the

fiscal administration issued 5.5 millionprinted income certificates.

PROPERTYGTC’s new owners target office developmentsPolish real estate developer GlobeTrade Center (GTC) is aiming to im-prove the results of the shopping cen-ters it owns in Romania in the short-term after being taken over by LoneStar Funds. The company is also look-ing at starting or buying projects inincipient phases, especially in the of-fice segment, announced GTC repre-sentatives. The developer owns office,retail and residential projects in Ro-mania, and since 1999 has investedsome EUR 400 million locally, accord-ing to its data. GTC was founded andpreviously controlled by Israeli in-vestment fund Kardan, which sold itsremaining 27.75 percent participationto US-based private equity firm Lone

Star Funds for EUR 160 million in November last year.

Sema Parc developer declared bankruptRiver Invest, the real estate developerof the Sema Parc office project inBucharest, has officially been madebankrupt in a Bucharest Court ruling.The company, controlled by local busi-nessman Ion Radulea, filed for bank-ruptcy at the end of last month. SemaParc was going to be developed onthe site of the former Semanatoareafactory in Bucharest, which was relo-cated. The project would have includeda business park, residential area, shop-ping village, hotel and social buildings.When the scheme was first announcedin 2006, the estimated investmentstood at EUR 1.7 billion. The platformcovers 40 ha and the first stage of theproject (two office buildings of 50,000sqm) was purchased in 2006 by Eu-ropolis (now CA Immo) for EUR 90million. The project collapsed shortlyafterwards due to lack of funding.

Having a Wales of a time: Romania fan Prince Charles visits Viscri and Valea Zalanului houses

Prince Charles paid a private visit to his Romanian properties last week. The heir to the British throne arrived inTargu Mures before visiting his Viscri house in Brasov county. According to Caroline Fernolend, vice-president of theMihai Eminescu Trust, he also discussed the extension of the Viscri property with an architect. During the visit, thePrince of Wales met Romania’s president, Traian Basescu, and its prime minister, Victor Ponta. Read more aboutPrince Charles’s visit to Romania in the City section.

Agerpres

4 NEWSwww.business-review.eu

Business Review | June 9 - 15, 2014

EU AFFAIRS

Romania not yet ready to adopteuro, says European Commission

TELECOM

License tender brings digital switchover one step closer

dations made to the government lastweek, it said that low fiscal complianceand high tax evasion “remain a drag onpublic finances”, while the high taxationof low and middle income earners doesnot support the creation of new jobs.

The government is currently negoti-ating with the joint mission of the In-ternational Monetary Fund, the EC andthe World Bank a five percentage pointreduction in the social insurance con-tribution paid by employers from July.According to media reports, the IMFsaid it would approve the move if thegovernment came up with measures toplug the gap in revenues. Ioana Petrescu,minister of finance, said the cut wouldcost the state budget a net RON 1.5billion. The EC commented that Romaniahad failed to implement any of the rec-ommendations published last week toreduce the informal labor market. Therewere around 1.4 million undeclaredworkers in 2012, making up about aquarter of the national workforce.

Increasing the tax take“Despite the implementation of the tax

compliance strategy for 2013-2017, tan-

gible progress in voluntary tax compli-ance and in fighting undeclared work islimited. Within the strategy, only medi-um-term indicators are set and thereare no intermediate indicators or con-crete targets for the individual measures,”said the EC. The minister of finance hasdeclared war on tax evasion, and sincetaking office in March has laid out severalmeasures to improve collection, suchas the enhancement of electronic in-struments for taxpayers and the closingof agreements with multinationals ontransfer prices. Last year, the country’stax collection-to-GDP ratio was the sec-ond lowest in the EU at 28.9 percent.

“Tax fraud and tax avoidance in theareas of VAT, excises, social securitycontributions and income taxation re-main a major challenge,” said the EC.

Lawmaking process sufferslack of transparencyThe EC has pointed out that the countryhas made “limited progress” in address-ing its recommendations to cut red tapeand improve the quality of regulations.For instance, companies still have to gothrough complex procedures to get elec-tricity or obtain construction permits.However, some progress has been reg-istered in the areas of insolvency, fol-lowing the rollout of a new code thisApril. The lack of clear information onreal estate rights remains problematic,as less than 50 percent of real estate(and associated rights) are registered inthe land book system and only 15 percentof real estate records are verified andregistered digitally. The EC has alsomade recommendations in other fields,including healthcare, energy and trans-port. Recommendations were publishedfor all EU members on June 2. ∫

Ovidiu Posirca

Not met all the criteria necessaryto join the Euro zone, still need-ing a stable exchange rate against

the euro, lower inflation and for its na-tional legislation to meet EU standards.

The report by the EC, which gaugesthe progress of countries aiming to adoptthe euro, says that Romania has mettargets related to public finances (a lowfiscal deficit and public debt) and hasbrought down long-term interest rates.

The country’s fiscal deficit is set tofall 0.1 percentage point against last yearto 2.2 percent, and will further narrowto 1.9 percent next year, according tothe commission’s predictions. It forecastthat the public debt would grow from38.4 percent to 40.1 percent in 2015. In-terest rates, meanwhile, stood at 5.3percent in April, below the referencelevel of 6.2 percent.

Romania has recently set the targetto join the Euro zone in 2019, althougheconomists have warned it may takemore than a decade to reach the realconvergence criteria. The country’s GDPper capita adjusted to purchasing powerparity was 50 percent of the EU averagein 2012, and should climb to at least 60percent before Romania attempts toadopt the euro, according to economists.

The GDP of Lithuania, which is setto joint the Euro zone next year, willreach a projected 78 percent of the EUaverage, up from 35 percent in 1995. Es-tonia adopted the euro this year with aGDP per capita of 60 percent of the EUaverage.

Labor painsThe commission acknowledged thecountry’s progress in restoring macro-economic stability last year, but warnedthat reforms in critical sectors have seenlimited progress. In a raft of recommen-

Flagging up progress: the EU has issuedrecommendations to all member states

How does the Romanian Cisco branch

rank in the region?

Romania is the most exciting market inSouth-Eastern Europe because it is thelargest. Size allows for scale and healthybusinesses. The public sector and SMEswill drive demand here. Cisco has 468active partners in Romania which resellour solutions. We are also running prob-ably one of the most successful CiscoNetworking Academy programs in Eu-rope here in Romania. We have 16,000people in the program and since westarted this program, 50,000 people havegraduated.

What are your strategic plans for Ro-

mania in the near future?

In the internet of things, what has hap-pened so far is only 1 percent of every-thing possible. We have not implementedsuch projects in Romania yet because itis so new. I think this will happen in largegovernment projects, to improve thequality of citizen services. What we wantto do in Romania is open discussionswith mayors to test how the idea is re-ceived. These are lighthouse accounts,so we will not go to every city. It is appli-cable in many big cities outsideBucharest; it could be Cluj, Timisoara,Ploiesti or Constanta.

Where do you see potential here?

Working with the government and gov-ernment agencies such as hospitals, po-lice and so on. Also in the SME sector,where companies are becoming moreconnected. SMEs contribute most of Ro-mania’s GDP and they are investing in IT.I think there will be demand for cloud-based services. As far as telecom oper-ators are concerned, Romtelecom is oneof our largest partners, but we are alsoworking with RCS&RDS, Vodafone andOrange. We used to work with all thelarge banks and we still do, but financialindustries are not having the best time.

otilia.haraga @business-review.ro

3QPeter HajduCisco managingdirector for SEE

The primary tender rounds forthe allocation of the five digitaltelevision multiplexes that will

support Romania’s transition to digitalterrestrial television took place lastweek.

RCS&RDS and the National Radio-communications Company (SNR) arethe candidates in the tender.

The first two primary rounds tookplace on Thursday, and an additionalround was held on Friday.

Following the first two rounds, thebidding commission announced thatdemand no longer exceeded supplyin either of the categories, and therewere still some multiplexes left. The

tender continued with a supplemen-tary round on Friday, which was opento both candidates.

The country’s telecom watchdogANCOM is in charge of allocating fivenational digital multiplexes in theDVB-T2 standard: four in the UHF (ul-tra-high frequency) band and one inthe VHF (very-high frequency) band.The multiplexes will be granted forten years, and the licenses will comeinto force in June 2015. The winnermust pay the license tax within 90days of the results of the selectionprocedure.

In the first primary round, the start-ing price for each multiplex was set at

EUR 300,000. In the coming rounds,the price will grow by between 5 and20 percent, but only where demandfor multiplexes exceeds supply.

In 2006, Romania committed, alongwith another 102 countries from Europe,Africa and Asia, to switch from analogcable to digital terrestrial televisionbefore June 17, 2015.

Romania will be among the last Eu-ropean countries to make this transition.

The strategy for the digitalswitchover and the national imple-mentation of digital multimedia serv-ices was approved by the Romaniangovernment on June 19, 2013. ∫

Otilia Haraga

REAL ESTATE

Transparency bid: Cluj-Napoca to publish list of property sale prices

from various sources, there are no free

statistics on actual sale prices.“Information about sale prices can

be found in the sale and purchase agree-ment between seller and buyer andCity Halls register all these contracts.Only they don’t register the actual pricein the deed,” he said. The Cluj-NapocaCity Hall “understood how useful suchinformation would be” and agreed tochange its software to register the saleprice too, added ANEVAR’s president.

Discussions with the City Hall startedtwo years ago, and so far valuators havereceived data for the first seven monthsof last year. “We hope to publish thebrochure by the end of the summer, oreven in early summer. The project couldbe expanded to other cities if it provesuseful. This is a pilot, but in the future,in order for it to be relevant, it shouldbe published at the beginning of eachyear with data from the previous one,”added Vascu.

The association is also working onsetting up a database with information

Agroup of valuators from Cluj-Napoca are working on a pilotproject in partnership with the

City Hall to publish a report on averagesale prices of homes in the city, AdrianVascu, president of the Romanian Val-uators’ Association (ANEVAR) and amember of the team working on theproject, announced last week in a pressconference.

The report, which could be publishedin early September, is intended to pro-vide the market with some much need-ed transparency, said Vascu, who isalso advisory director, valuations, atKPMG in Romania. It will be based ondata collected by the City Hall and willprovide statistics on actual sale pricesin various parts of the metropolis in2013.

This initiative would make Cluj-Napoca the first Romanian city wheresuch information was available to thegeneral public. While data about askingprices in Romania is widely available

NEW S 5www.business-review.eu Business Review | June 9 - 15, 2014

Adrian Vascu, president of ANEVARand advisory director at KPMG

Courtesy of Anevar

EUR 30 mlnthe estimated value of

the local valuation

market

about all the property valuations con-ducted country-wide for banks. Onceit becomes operational, ANEVAR willbe able to provide statistics on propertyvaluations. Vascu estimates the localvaluation market at around EUR 28million to EUR 30 million, the bulk ofwhich is generated by property valua-tions. There are 4,500 authorized val-uators in Romania, all members ofANEVAR. ∫

Simona Bazavan

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Business Review | June 9 - 15, 2014

INVESTMENTS

Cereal monogamy: Kellogg’s joins firms transferring operations to Romania

In another expected move, US com-pany American Superconductor willopen a plant in Timisoara to which itwill relocate some production of com-ponents for wind turbines from China,as part of a restructuring and cost re-duction plan.

The production facilities in Chinawill continue to serve the Chinese mar-ket but the company has decided tomove the manufacturing of electroniccontrol systems catering for clients out-side China from Suzhou to Timisoara.The plant should become operationalduring the fiscal year 2014.

Recently, IT service supplier Luxoftannounced it would move 500 pro-grammers it employs in Russia andUkraine to countries such as Bulgaria,Poland and Romania. The move comesas a result of concerns US and Europeanclients have raised regarding politicaltensions between Ukraine and Russia.

The IT service supplier has 7,500employees, 49 percent of whom workfrom Russia while 29 percent are inUkraine, according to data supplied atthe end of March.

Some of the programmers couldcome to Romania, where the companyis planning on expanding.

Luxoft currently has offices inCyprus, Bulgaria, Germany, Poland, Ro-mania, Russia, Singapore, Switzerland,Ukraine, the UK, USA and Vietnam. InRomania, the firm has 800 employees.

Romania was a country of choice forDeutsche Bank, which this May inaugu-rated in Bucharest the DB Global Tech-nology Center, its first such center inSouth-Eastern Europe. The center will

recruit up to 500 people by the end of2016.

“As traditional partners of Romania,Deutsche Bank is consolidating its long-term commitment towards our countryby inaugurating a technology center inBucharest. DB Global technology willdevelop advanced technological solu-tions for numerous Deutsche Bank ac-tivities, which illustrates the enormouspotential of the local IT&C sector,” saidMihai Ionescu, representative ofDeutsche Bank in Romania, in a pressrelease. The recruitment process startedat the end of 2013, and by the end of thisyear, DB estimates there will be 200 spe-cialists working at the facility.

Last year, Vodafone Romania movedits network operations to the DanubiusRegional Network Operations Center,which will provide services to seven Eu-ropean networks: Vodafone sub-sidiaries in Romania, Italy, Greece, theNetherlands, the Czech Republic, Alba-nia and Germany.

The Danubius center was set toreach 500 employees by end 2013. Theteam monitors the 2G, 3G and 4G net-works, manages incidents that crop upin the networks, addresses systememergencies in the territory and inter-acts with local technical support teams.

Bloomberg reported that Vodafonewould cut 500 jobs in Germany, andmove some of its operations to Romaniaand India. Some of Vodafone’s main re-gional operations would be transferredto Romania while information-technol-ogy operations would be relocated toIndia.

Meanwhile, last year, RaiffeisenBank inaugurated its Brasov operationalcenter on the Tractorul Platform inCoresi Business Park, where over theprevious couple of years it had trans-ferred a series of operational activitiessuch as processing transactions, callcenter activities, the analysis and man-agement of retail loans and loan collec-tion activities. The Brasov siteemployed approximately 600 peoplelast year.

“The opening of the Brasov opera-tional center was a strategic decision bythe bank. We aim to be more cost effi-cient and simplify operationalprocesses. We analyzed various loca-tions and finally settled for Brasov,mainly for the quality of the labor forceand the geographical location,” said CarlRossey, the bank’s vice-president of ITand operations.

otilia.haraga@business-review.ro

Cereal maker becomes serial investor

∫ OTILIA HARAGA

Cereal and snack manufacturer Kel-logg’s has chosen Bucharest for a Euro-pean Global Business Services (GBS)center that will handle human re-sources, IT and supply chain processes,as well as finance jobs currently held bypeople at the Talbot Road office in OldTrafford, Manchester. The head office innorth-west England employs 600 peo-ple, and the company announced thatit had started consultations with theemployees, according to www.thebusi-nessdesk.com.

The firm alighted on Bucharest forthe Kellogg’s European GBS center be-cause the city has the established infra-structure required and is already hometo similar service centers for other large,global companies, including P&G andEricsson, revealed its CEO.

In a statement, chief executive JohnBryant said, “To deliver on our strategyand grow our business around theworld, we need new ways of operatingin an increasingly complex, global busi-ness environment.”

The group added that a move to aGBS model “will drive efficiencies thatgenerate cost savings for Kellogg’s toreinvest in its business to drivegrowth… Some global GBS work couldmove to strategic business partners;some regional GBS work could transi-tion to Kellogg-operated service cen-ters; and some local GBS work could beperformed in existing Kellogg’s loca-tions.

Kellogg’s is one in a series of compa-nies to relocate activities to Romania.Next year, French group Michelin willclose its truck tire production unit inBudapest, which has over 500 employ-ees, and transfer production to plants inOlsztyn (Poland), Zalau (Romania) andKarlsruhe and Homburg (Germany).

“Following unfavorable trends andaggressive competition on the Euro-pean truck tire market, which remainsvolatile and has dropped by 23 percentfrom the historic maximum registeredin 2007, Michelin announces its inten-tion to close its truck tire plant in Bu-dapest. The decision comes because theunit can no longer be expanded as it islocated in an urban area, and increasingcompetitiveness would require excessive modernization with newequipment,” said company officials.Production at the Budapest plant willcease in mid-2015.

MOST READ www.business-review.eu

1 Simona Halep, favorite to winRoland Garros: World’s mediashowers her with praise after winagainst Heather Watson

2 Kellogg’s starts moving jobs fromUK to Romania, inspired by othermultinationals

3 EY: Romania surpasses Hungaryto become third most attractiveCEE market for foreign investors

4 Ilie Vonica, owner of Polisanogroup, dies in apparent suicide inSibiu

5 Highest and cheapest gasolineprices by country: Romaniamoves up six positions in the ranking

WEEK AHEAD

June 11

Dev Talks 2014 Dev Talks 2014 is a key event for thedeveloper community, designed tobring contemporary professionals deeptechnical content and insight. 9.00, Radisson Blu Hotel.

June 12 - 13

ICEEfestThe Interactive Central and Eastern Eu-rope Festival (ICEEfest), which bringstogether global digital companies,well-known producers of online con-tent, internet sales pundits and com-munication specialists, is now on itsthird edition. Business Review will bepresent at the event with a specialbooth, so don’t forget to drop by!9.30, Grand Cinema & More at BaneasaShopping City.

June 16

Focus on EnergyThe outlook for the renewable sectorfollowing the overhaul of the incentivessystem and the avenues to increase thebankability of energy projects will be upfor debate during the fifth Focus on En-ergy, organized by Business Review.Log on to the business-review.eu web-site for more details about the speak-ers and registration. 9.00, Ramada Plaza Hotel, Europa Hall.

Save the dateAmCham 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 amcham@amcham.ro or by phone at + 40 21 312 48 34 to buy your invitation.

American multinational food manufacturing company Kellogg’s looks set to movearound 80 jobs from its Manchester headquarters to a new office in Bucharest. Overthe past year, several major firms have announced their intentions to move divi-sions to Romania, joining others that have already done so.

NEWS 7www.business-review.ro Business Review | June 9 - 15, 2014

Bogdan Balaci is the new general manager ofPhilips Lighting, responsible for thefirm’s South-East Europe business.With over 15 years of managementexperience in the IT sector, Balaciwas formerly CEO of cloud solutionsprovider Ymens. Until October 2012,he served as general manager ofIBM Romania, overseeing the opera-tions for Romania and the Republicof Moldova.Previously, he held sen-ior management positions withinIBM Romania, including countrysales manager, global technologyservices manager and operationsmanager. Balaci graduated from thePhysics Faculty of the University ofBucharest and has an MBA fromHenley Business School in the UK.

Ruxandra Bese has joined Im-

mochan, the realestate division ofretailer Auchan,as developmentdirector. She pre-viously worked forDecathlon for over

ten years. During the past sevenyears Bese was responsible for thesports retailer’s expansion to 13 out-lets on the local market as expan-sion director. Immochan Romaniamanages nine commercial centersand has a team of 23 employees.

Alina Bratuis the new communication managerat Pro TV. For the past 13 years shehas worked for beer producer URBB,her last position there being corpo-rate affairs manager and seniorbrand manager. Bratu graduatedfrom SNSPA Bucharest with a mas-

ter’s degree inpublic relationsand managementand also com-pleted an EMBAprogram in theWU ExecutiveAcademy, part of

the Business University in Vienna(2010-2012).

Akos Forras has been appointed country man-ager of furniture retailer Kika Ro-

mania. He is replacing Lars Lund,who after holding the position for thepast five years has decided to moveback to Sweden. Forras will be re-sponsible for the Kika store in Ro-mania as well as outlets in the CzechRepublic, Hungary and Slovakia. InRomania he will coordinate the mar-keting and acquisition departments.Forras has been working for theSouth African Steinhoff Group, whichtook over Kika /Leiner last year, forthe past four years.

Costin Matacheis the new generalmanager of cloudprovider Ymens,replacing BogdanBalaci. Matachehas 12 years ofprofessional expe-rience in the IT in-

dustry, and during his career hasheld various positions at multination-als such as IBM and ING Romania.Over the past seven years, he hasworked for IBM Romania in variouslocal and regional managementroles, such as core consulting leader,global business services leader andapplication management servicesleader for South-Eastern Europe.

WHO’S NEWSBR welcomes information for Who’s News. Submissions may be edited

fo r length and clarity. Get in touch at simona.bazavan@business-review.ro

CFR Marfa fires managing boardMembers of CFR’s managingboard were dismissed last week,after a meeting with the company’s shareholders, accord-ing to former board president,Liviu Radu, reports hotnews.ro.

“They showed us a law that al-lowed them to fire us. I personallydon’t believe I ever did anythingthat could be harmful to the com-pany. I will discuss things with mycolleagues and see what we cando,” said Radu.

“The meeting was attended byshareholders but I don’t knowthem all because the GeneralShareholders Assembly also un-derwent changes recently. Also

present was Adrian Nica, head ofthe Transport Ministry’s auditbody.” The dismissed board hadbeen appointed at the beginningof 2013.

According to Digi24, the new managing board at CFRMarfa includes: Mircea FlorinBiban, chief inspector in the Railway Safety Inspectorate; Alina Paraiala, cabinet director for the Transport Ministry;George Buruiana, who sat on theold board; Dan Toader, TransportMinistry advisor; Dan Jianu;Vasile Rodin-Calomfirescu; and Elena Viorica Merticariu, advisor.

8 www.business-review.euBusiness Review | June 9 - 15, 2014

A clear shift in attitude has taken place on the real estate market in 2014 compared to five years ago, agreedparticipants in the 13th edition of BR’s Realty event, held last week. The growth of the office segment heralds thebeginning of a new real estate cycle, albeit on a different scale and involving different premises this time around,said players.

Real change on the horizon as opportunity replaces fear

1. Diana Tenea, general director, General Directorate for Regional Development and Infrastructure, MDRAP 2. Nicoleta Radu,business intelligence consultant, Zanti Exclusive 3. Anca Bidian, general manager, Kiwi Finance 4. Georgian Marcu, presi-dent, APAIR 5. Alexandra Coltos, urban planner, Center of Excellence in Planning 6. Aurelia Cionga, president, RaiffeisenBanca pentru Locuinte

∫ SIMONA BAZAVAN

“A new real estate cycle truly beginsnot when developers start or resumeprojects they’ve had in their portfo-lios for years. When there is real newdemand, when developers and in-vestors are looking for new assets todevelop, that’s when we can reallytalk about a new real estate cycle,”said Attila Peli, head of developmentand land at JLL. This began to happenin the middle of last year, he added.

“The resetting of the local economyand that of the local real estate sectorstarted to take place in the secondhalf of last year,” agreed Laura Bencze,head of research at CBRE.

And like the last time around, it isthe office segment, with its lower as-sociated risk, that kickstarted the newcycle. Lower costs have attracted newcompanies, especially BPOs and SSCs,to come and invest locally over recentyears. Romania now finds itself on thesame list of potential new investors asPoland and the Czech Republic.

“There are a lot of foreign compa-nies coming to Romania or watchingthe local market very closely becausethey think that Poland has becomeslightly too expensive from the per-spective of labor and real estate costs,”explained Bencze.

The international context is defi-nitely favorable to Romania, addedPeli. Recent events in the region arecreating a “new border effect” whichwill further push Western companies

1 2 3 4 5 6

to invest in Romania, to which headds the “feeling of Poland overheat-ing”.

Peli, who thinks that the new cyclewill peak in three or four years, saysthat so far demand for land has comefrom office developments alone dueto the lower risks, but the other realestate sectors will see their turn cometoo over the next couple of years.

“We will see a peak around 2017,2018, which means the right time tostart new developments is about now.What we have learned from the previ-ous real estate cycle is that playerswho started a development in 2003-2005 also had time to make an exit.The ideal scenario is to be among thepioneers,” he said, adding that thereare several developers, some with ex-perience on the local market as wellas newcomers, who have understoodthis.

Bucharest continues to take thelion’s share of new companies enter-

ing the market and new office devel-opments, but things are moving in therest of the country as well. Cluj-Napoca will see its stock of modernoffice space grow by half again thisyear and the next, said Bencze. West-ern Romania is also attractive for in-dustrial developments, especially inthe field of automotive production,which is set to grow even further, sheadded. Last year CBRE brokered in-dustrial space for production facilitiestotaling some 20,000 sqm, out ofwhich only a small share was inBucharest.

Romania may be scoring pointsagainst other regional countries suchas the Czech Republic and Polandwhen it comes to workforce costs, butit definitely gets a poorer ranking interms of legal and fiscal predictability,argued participants.

The most recent example is the 1.5percent construction tax which cameinto force this year and which appliesto buildings that were previously tax-exempt, said Nicoleta Radu, businessintelligence consultant at Zanti Exclu-sive, and the event moderator.

With the government making littleprogress in improving overall tax col-lection despite tax levels in otherareas already surpassing EU averages,it was only to be expected that itwould hike taxes elsewhere, such as in the real estate sector, com-mented Alexandra Smedoiu, seniormanager in tax consultancy at PwCRomania, adding that profits and rev-enues could also be taxed more in thefuture.

“This tax is causing quite a fewproblems for a number of people inthe market,” said Victor Constanti-nescu, partner at Biris Goran. One ex-ample is the industrial sector. There

are industrial parks that had tax-freestatus for a number of years andwhere local councils have been work-ing for years to get investors to cometo disadvantaged areas by givingthem tax incentives, only to have thecentral authorities introduce this newtax, he outlined, stressing that it wasa clear example of a poorly thought-through measure.

“It hasn’t scared people away but itshakes their confidence,” he added.

Hopes of a residential revival“The market has gone forward in terms

of demand but banks aren’t catchingup,” said Anca Bidian, general man-ager at Kiwi Finance, summing up thegeneral feeling. In order to reducerisks, banks have tightened proce-dures to the point where bureaucracyhas become the main issue the sectoris struggling with at present. “Thebanking system is running prettymuch like the Ministry of Finance inthis regard,” she commented. “A wor-rying share of credit requests are de-nied for bureaucratic reasons alone.”

There is liquidity in the market,and the growing demand and clearsigns that even the residential marketis entering a new growth phase willpush banks to further loosen creditfor end users, added Bidian, but thesame cannot be said about securingfinancing for residential develop-ments, complained other participants.

“It is too early to talk about the resi-dential market (…). There are two en-tities dictating this. On one handthere are the banks who cannot beconvinced overnight to start financ-ing the residential sector, and on theother hand there are the developerswho so far don’t want to hear aboutresidential projects,” said Peli, pre-

Photos: M

ihai Constantineanu

Year 2008 2010 2014

Household revenue EUR 660 EUR 660 EUR 660 Level of indebtedness 50% 50% 50%Loan duration 30 years 30 years 30 yearsMaximum loan EUR 52,000 EUR 48,000 EUR 55,000LTV 75% 75% 75%House price EUR 69,000 EUR 64,000 EUR 73,300Construction price EUR 1,840/sqm EUR 1,150/sqm EUR 920 EUR/sqmBuilt area 37sqm 56sqm 80sqm

Source: Kiwi Finance estimations based on the revenues of an average two-personhousehold with no other debts

Property possibilities: what type of homecan a household earning EUR 660 buy?

9www.business-review.euBusiness Review | June 9 - 15, 2014

1. Attila Peli, head of development and land, JLL 2. Laura Bencze, head of research, CBRE 3. Alexandra Smedoiu, senior manager, tax consultancy, PwCRomania 4. Victor Constantinescu, partner, Biris Goran

dicting that the situation couldchange next year.

A sign that the market is maturingand heading towards an upturnwould be the diversification of financ-ing methods beyond the Prima Casastate-backed loan scheme, set up tohelp first-time buyers get on the prop-erty ladder.

At present, home acquisitions orconstructions financed through thesavings-lending system (known asBauspar) have a penetration rate ofonly 2 percent in Romania comparedto about 66 percent in Austria, 42 per-cent in the Czech Republic, 25 percentin Slovakia and 13 percent in Hungary,said Aurelia Cionga, president of Raif-feisen Banca pentru Locuinte (RBL).Given the improving macroeconomiccontext and lower risks such loanschemes carry, she is confident, how-ever, that about 10 percent of Roma-nians will opt for this financing

method in the future. One sign thatlocal buyers are starting to trust in thesystem is that RBL increased thenumber of savings-lending contractsboth last year compared to the previ-ous one and in early 2014 y-o-y, addedCionga.

In the meantime, the price of

apartments continued to drop lastyear. Sale prices for apartments inBucharest were 5.6 percent lower inMarch this year compared to the samemonth in 2013, said Georgian Marcu,president of the Romanian real estateagencies association, APAIR.

Bucharest’s ‘Laser Valley’and EUR 3 billion Gara deNord revamp projectThe Gara de Nord railway station inBucharest could be transformed overthe next decade into a regional inter-modal railway hub and a modern anddynamic urban development, shouldthe urban revamp project presentedduring the event by Alexandra Coltos,urban planner from the Ion MincuCenter of Excellence in Planning, be-come reality.

The project is currently in its study

phase but its initiators are hoping itwill be turned into a public-privatepartnership in the not so distant fu-ture. The result would be the transfor-mation of the shabby Gara de Nordhistoric building into a modern shop-ping mall with all railway activitiestransferred underground. This wouldfree up major space in one ofBucharest’s key areas to be used forreal estate developments, said theteam behind the project.

The investment required for thistransformation would be around EUR3 billion, most of which would comefrom public funds and EU money, butalso from private sources. Should theproject be implemented, it would be-come the largest and most complexurban transformation projectBucharest has seen over the past fewdecades.

This is not the only urban transfor-mation scheme the Ion Mincu Centerof Excellence in Planning is workingon at present. The second is the trans-formation of Magurele, a town closeto the capital, into Bucharest’s own

“Laser Valley” and an internationalphysics hub. A high-power laser iscurrently being built there, the ELI-NP (Extreme Light Infrastructure-Nu-clear Physics) project, which will seethe construction of the most powerfullaser beams and most advancedgamma beams in the world.

simona.bazavan@business-review.ro

1 2 3 4

2013 y-o-y 12 mo outlook

Completions 119,000 sqm +143% positiveTotal stock 2.08 mln sqm +6% positiveVacancy rate 14.4% -1.6% contractionGross take-up 293,000 sqm +20% positiveNet take-up 150,000 sqm +65% positivePrime headline rent EUR 18.5/sqm/mo - stagnationPrime yields 8.25% - negative

Source: JLL

Bucharest office outlook

10 FOCUSwww.business-review.eu

Business Review | June 9 - 15, 2014

Romania’s big energy projects stuck in limboWith the country in need of at least EUR 30 billion of investments to modernize its energy generating capacity,experts say that investors are looking at Romania – although constant legal changes could hinder their long-term local plans. Large production investments have yet to materialize as the government is struggling to find investors.

∫ OVIDIU POSIRCA

Policymakers said these billions –when they come – would be put intomodernizing assets and building newinterconnections, as well as strength-ening the grid and building more effi-cient capacities.

Evergreen projects“What we need is streamlining. We

have a worn out base (e.n. of assets)that needs to be replaced. This must bedone more aggressively in the comingperiod than it has been so far,” inde-pendent energy expert GeorgeCristodorescu told BR.

Big projects, such as the two nu-clear reactors at Cernavoda and thehydro-pumping storage plant in Tar-nita, which have a combined price tagof around EUR 8 billon, have remainedin the planning stage due to a lack ofinvestors. The government, however,says that getting financing for theseprojects is a priority.

Constantin Nita, the minister ofeconomy, said last week during theEnergy Investors Summit that theselarge-scale investments are in differentstages of negotiations.

“These are investments we are willingto make and are part of the govern-ment’s investment strategy. Some ofthem have generated a lot of debate, butI assure you of the government’s resolveto do them, whether some parties agreeor do not agree with them,” said Nita.

State-owned China Huadian Engi-neering is set to start work this year ona new EUR 1 billion generating unit inRovinari, part of the Oltenia EnergyComplex. Another Chinese firm, Gen-eral Nuclear Power Corporation, hasrecently extended the letter of intentwith Nuclearlectrica, the state-ownednuclear power producer, to developnuclear reactors 3 and 4 at Cernavoda.

Kari Nyman, lead specialist in thesustainable development department,Europe and Central Asia region, at theWorld Bank, said that the investmentclimate for nuclear energy is not favor-able right now, mainly due to the acci-dent at Fukushima. According tomedia reports, China is also looking toback the construction of the Tarnitaplant.

Greater legal riskOtilia Nutu, energy and infrastructureanalyst at think tank Expert Forum,noted that the market demands in-vestments, but the uncertainty of thelegal framework increases the invest-ment risk.

“First of all we should stop changingthe laws so often because when youstart to introduce new laws withoutconsulting anyone, such as the con-struction tax, or to change the law,such as with renewable energy, youcreate an unstable environmentwhere nobody dares to invest and ex-pect to recover it for at least threeyears,” Nutu told BR.

She said there was also a problemwith inefficient energy producers controlled by the state, which receivean array of subsidies. Some capacitieshave been operating for up to 40 yearsand yet are technically bankrupt.

“The amount of energy could beproduced by more efficient players be-cause this is what investments mean,to replace inefficient capacities withmodern technologies,” said the ana-lyst.

However, most electricity produc-tion is controlled by the state and anyclosing of capacities and redundan-cies would have a huge political cost, according to commentators. For instance, the Oltenia Energy Holding employs 19,000 people andhas one of the highest electricityprices on the market. The complexproduces electricity and thermal en-ergy from lignite.

“The state should cut the stimulusgranted to inefficient pieces in the sys-tem. We are continuing direct subsi-dies for coal. Last year, a governmentordinance was issued granting accessto the (e.n. electricity) market to Olte-nia and Hunedoara Energy Complex,”said Nutu.

Investors looking to tap the Ro-manian market will also have prob-lems finding forecasts of demand forelectricity and gas in the coming years.The best estimates are currently madeby Transgaz and Transelectrica, theoperators of the gas transport networkand electricity grids, which use themto plan their own investments.

In the meantime, some state-owned energy companies have been

listed and attracted financing to fundtheir investment program. Last year,the government sold minority stakesin Nuclearelectrica and Romgaz, thegas producer, through initial public of-ferings on the Bucharest Stock Ex-change. The IPO in Electrica, theelectricity supplier and distributor,should kick off in mid-June with theoffering expected to raise up to EUR400 million. A 51 percent stake in thecompany will be sold in Bucharest andLondon and the proceeds used to im-prove the company’s transport infra-structure.

Nymen of the World Bank sug-gested that the pipeline of IPOs has at-tracted foreign investors, adding thatRomania “has a good investment en-vironment right now”.

Making offshore and shalegas countRomania is set to reach energy inde-pendence by the end of this decade onthe back of fresh gas production in theBlack Sea, according to commentators.Shale gas would also play a significantrole. US oil major Chevron has juststarted exploring shale gas in theMoldova region and commercial ex-ploitation could start by the end ofthis decade.

However, the government willneed to back this sector, as shale gashas generated controversy in Europedue to concerns regarding the impactof fracking (the process of pumpingwater, sand and chemicals at highpressure to break shale rocks) on theenvironment.

US oil major ExxonMobil is jointly

seeking gas in the Black Sea with Aus-tria’s OMV Petrom. The companieshave found a gas deposit containingbetween 42 and 84 billion cbm in oneblock.

Now the question is to what extentthis significant gas deposit will benefitthe local economy.

“There has to be a market on whichcompanies can sell gas. For a longtime Romania used to regulate gasmarket contracts very closely, eitherdirectly or indirectly. That is nowchanging and liberalization is under-way,” Nyman, of the World Bank, toldBR.

He argued that the development ofthe gas market should follow that ofelectricity where there is a developedmarket for traders.

This could, for instance, convinceExxon to sell some of the gas in Roma-nia instead of selling all the outputabroad.

“From their perspective, thecloser to production they sell it, the

better. So they are not looking to shipit to the other side of Europe,” saidNyman.

Black Sea gas should be trans-ported through Romanian infrastruc-ture and Transgaz will have to investto develop the network.

According to Nyman, the financingenvironment has improved lately,which should make it easier for Roma-nia, which has good macroeconomicfigures, to tap the international finan-cial markets and fund some energy in-vestments.

ovidiu.posirca@business-review.ro

Source Total Production Import

Coal 1,226 1,129 97Oil 2,492 950 1,542Gas 2,464 2,185 279Electricity* 1,203 1,194 9.1Imported 421petroleum products

*hydro, wind, solar, nuclear energy and imported electricity

Local primary energy sources in Q1 2014 (thousands of tons of oil equivalent)

Source:INS

FOCUS 11www.business-review.ro Business Review | June 9 - 15, 2014

Nuclearelectrica hit by renewable surgeDaniela Lulache, general manager of Nuclearelectrica, the state-owned nuclear producer, says that the com-pany will register lower income from the sale of electricity, as renewable producers, supported by incentives,have flooded the market with cheaper energy.

∫ OVIDIU POSIRCA

Will the construction tax impact Nuclear-

electrica’s investment program?

Of course it will, because it reduces ourprofit. We have to revise the whole pro-gram, including investments, because itis clear that the level of profit we can ob-tain today cannot sustain major invest-ments. We will pay RON 89 million inconstruction tax this year. We expectour profit to reach RON 30 million com-pared to profit of RON 427 million in theprevious year.

How was last year’s profit achieved?

From good sales of energy in conjunc-tion with a reduction in costs. This yearwe have a dramatic reduction in income.For instance, the average price at whichwe sold last year on the competitivemarket (OPCOM) was around RON 195per MW, while this year the forecast isaround RON 160 per MW.

Is the reduction of overall electricity con-

sumption a factor in the shrinking in-

come?

I would not say lower consumption is afactor, because we are selling all ourproduction. From my point of view it isinstead due to the impact of renewableenergy, which players can afford to sellat extremely low prices – I could evensay at zero – because they have consis-tent subsidies. This has led to mutationsin the market. A large share of PCCB (thebilateral electricity contracts market),

which was the market where we, thelarge producers, used to sell, has movedonto the PZU (the next day market). ThePZU used to host 10-15 percent of alltransactions and now it is closer to 40percent.

What is the status of the construction

project for the two new nuclear reactors

at Cernavoda?

We are working on them, remaining inthe same program. We hope that by theend of the year we will have a clear de-cision on this project, in terms of theway it goes forward. It is still a strategicproject for Romania and it remains onthe list of priorities.

Will a Chinese company get involved in

the construction of the reactors?

There is interest, greater or smaller,from multiple sides and it will be testedwhen the project happens and is put onthe market.

Should we expect any progress on this

project by year end?

The progress we’re waiting for mustcome first of all from us, because, as we

said at the beginning of this year, we areresettling this project together. We arenot sitting around, waiting for investors.We need to present a story to the in-vestors and we are working on it rightnow.

How much will the construction of the two

reactors cost?

There are all kinds of figures but wehave an estimate from the feasibilitystudy of around EUR 6.2 billion.

How will the financing of the project be

structured? Will the investor bring all the

money?

There will definitely be mixed financing.You cannot have a single source. We willcertainly have our own sources, loansetc.

Are you dealing with political pressures?

No, I cannot complain about pressuresfrom the political side; the only pres-sures are to deliver on what we prom-ised. There are inconveniences, such asthe construction tax, but not pressures.

ovidiu.posirca@business-review.ro

Photo: M

ihai Constantineanu

12 CITYwww.business-review.eu

Business Review | June 9 - 15, 2014

Top TIFF tips: must-see movies from Clujcoming to the capitalCluj-Napoca was the talk of the cultural world for tendays, during which the Transilvania International FilmFestival (TIFF) screened over 217 movies from 55countries complemented by countless related events.BR asked the artistic director of the event, Mihai Chirilov, for his highlights, some of which are beingscreened in Bucharest this week.

OANA VASILIU

Stephen Frears’s Philomena andRichard Linklater’s Boyhood were thetwo must-sees in this year’s selection,and Chirilov also strongly recom-mends a film he discovered last yearthat was produced in the 60s. TheTIFF director describes Before theNight is Over, from director PeterSolan, as “a revelation – the kind offilm the cinema was invented for”.

Chirilov, whose aim through thefestival was to discover distinctivevoices, calls the 12 movies that

screened in competition an organicwhole in which each film has its place.The line-up is: Blind (directed by EskilVogt), Everything We Loved (Max Cur-rie), Fish & Cat, (Shahram Mokri),Floating Skyscrapers (TomaszWasilewski), Paat (Amir Tood-ehroosta), Quod Erat Demonstran-dum (Andrei Gruzsniczki), Still Life(Uberto Pasolini), The Voice of theVoiceless (Maximón Monihan), Vikto-ria (Maya Vitkova), Vis-à-vis (NevioMarasović) and White Shadow (NoazDeshe).

Of the 34 movies selected in theSupernova category, Chirilov particu-larly endorses ten: Of Horses and Men,The Empty Hours, Ida, Siddharth,Love is Strange, We are the Best!, TheKidnapping of Michel Houellebecq,Beloved Sisters, Paupusza and BlackCoal, Thin Ice.

This year’s TIFF also ventured intoextreme territory, with Chirilov high-lighting the Swedish film SomethingMust Break, whose director came toCluj to explain his work. Other chal-lenging works included Moebius, inwhich Korean director Kim Ki-dukgoes beyond all limits to tell a remark-ably well shaped story given the ab-sence of any dialogue; R100, fromJapanese director Matsumoto; andNew Tits, in which the viewer followsSacha Polak in her exploration (withsome comic moments) of the effectsof breast cancer.

From June 10-19, Bucharest willhost a retrospective of TIFF, at Cin-ema Studio, Cinema Elvira Popescuand J’ai Bistrot. Almost 50 films willbe shown in the capital, including the12 films that screened in competition.Highlights will be Black Coal, Thin Ice;Sacro GRA; Bad Hair; Historia de lamevamort; We are the Best!; Ida, Cani-bal; Philomena; Via CastellanaBandiera; Beloved Sisters; BeforeTonight is Over; La gran familia es-pañola; and Viva la liberta!.

Vlad Petri’s documentary about thestreet movement Salvati Rosia Mon-tana, Bucuresti, unde esti? (Bucharest,Where are You?) will premiere on June13 at Cinema Studio.

oana.vasiliu@business-review.ro

Mihai Chirilov, TIFF artistic director

Prince Charles receiving his honorarydoctorate from Bucharest University

l TIFF’s major campaign thisyear endeavors to save the bigscreen, meaning a number ofclosed down cinemas that havegone bankrupt or simply falleninto decay. With a long-termstrategy that covers picturehouses all over the country, Ro-manian Film Promotion is be-ginning with the FilmWarehouse, for which fundrais-ing efforts have been launchedwith a target of EUR 7,000. Readmore about this campaign innext week’s edition of BR.

Saving the Big Screen

Blue House, ViscriThe prince bought the traditional18th century Saxon house in Viscriin 2006. It was the first property heacquired in Romania, for a reportedGBP 12,000. Now a guesthouse, itfeatures three double bedrooms,two bathrooms and a kitchen. Thevillage of Viscri is on the UNESCOlist of World Heritage Sites of Tran-sylvanian villages with fortifiedchurches, alongside Biertani, Pre-jmer-Tarlau, Darjiu, Saschiz-Keisd,Calnic and Valea Viilor.

Valea Zalanului/ZalanpatakIn Zalanpatak, the prince owns afarm, which he bought in 2010,made up of several buildings. Theproperty, which has a patch of for-est and extensive flower meadows,enjoys a rich biodiversity of plants,insects, birds and large mammals.A resident ecologist welcomesguests, who can be accommodatedin the property’s five double rooms.

The property in Viscri can be rentedthroughout the year. Please seehttp://www.transylvaniancastle.com

Crown estate: PrinceCharles’ properties in Transylvania

Prince Charles urgesRomania to preserve‘traditional way of life’

The Prince of Wales urged Romania topreserve the traditional way of life andhistorical architecture that are its sta-ples, arguing that this could help bringfuture financial benefits. “Romanianshave much to be proud of, and this

pride should lead you to do everythingpossible to protect your traditional wayof life and historical architecture. (…)The historic architecture and associatedlandscapes I see all over the country aredistinctly of Romania, and are such animmense asset,” said the prince, as hereceived an honorary doctorate fromthe University of Bucharest for his con-tribution to sustainable agriculture andrural development. Prince Charles wasin Romania for a private visit to hisproperties in Viscri and Valea Zalanului.

Among the local sites mentioned bythe royal were the ornamented housesof Bucovina, the carved wooden housesin Maramures, the decorated dwellingsin Oltenia and the Saxon houses inTransylvania. The prince gave the ex-amples of Italy and Switzerland in out-lining the options of being a moderncountry while retaining the traditionalaspects of a culture’s heritage. “I havebecome fond of your country over thelast 16 years and I hope and pray thatRomania will be able to keep that whichit still has; to keep things distinctly Ro-manian, and not throw everythingaway,” he said.

Prince Charles has been coming toRomania since 1998, when he made theonly official visit to the country. Most ofhis private visits were to the counties ofMures, Covasna, Harghita and Brasov.Among the issues he supports are thepreservations of traditional rural com-munities, both in the UK and interna-tionally. He is a patron of the MihaiEminescu Trust, a foundation dedi-cated to the conservation and regener-ation of villages in Transylvania andMaramures. The heir to the Britishthrone has bought and renovated twoproperties in Romania: one in Viscri andthe other in Valea Zalanului. On his firstvisit to Transylvania he said he wasoverwhelmed by the “extraordinarilyrich heritage” of the area and impressedwith the fortified Saxon villages in Tran-sylvania, built by German settlers tryingto withstand Tatar and Turkish inva-sions. However, following large-scalemigration, the sites today are faced withthe problem of an ageing and decliningpopulation.

Prince Charles is also a supporter ofTransylvanian woods. He featured inthe mini-series Wild Carpathia, firstbroadcast in 2011, which promotes several areas of Romania, including Maramures, Bucovina, the Fagarasmountains, Valea Zalanului and Saschizvillage.

Prince Charles’s visit to Romaniaalso included meetings with PresidentTraian Basescu and PM Victor Ponta.

editorial@business-review.ro

Courtesy of U

K Em

bassy

CITY 13www.business-review.euBusiness Review | June 9 - 15, 2014

LESLIE HAWKE

People don’t talk much about depres-sion in Romania. Maybe that’s why ittook 12 years for the most renownedand frequently quoted book on the sub-ject to be translated into Romanian. InApril, Humanitas published The Noon-day Demon under the title “Demonulamiezii” and it is already a bestseller inRomania.

The author, Andrew Solomon, willbe in Bucharest on Friday, June 13 at17:00 to speak and autograph copies ofthe book, in both English and Romanian,at the Humanitas bookstore on Bulevar-dul Regina Elisabeta near Cismigiu Gar-den. This is a fantastic opportunity tohear and meet one of the most ac-claimed American writers of the 21stcentury – and to be exposed to his per-spective on depression, a subject thattouches practically everyone, either di-rectly or indirectly, at some point intheir life, even if they don’t necessarilyname it as such.

Andrew Solomon happens to be along-time personal friend and a boardmember of the Alex Fund, the US non-profit that raises about a fifth of Asocia-tia OvidiuRo’s annual budget. Thereason I am so excited about his appear-ance in Bucharest on June 13 is three-fold. The first is highly personal.Depression seems to run in my family.Major mood swings, episodes requiringhospitalization, medication and treat-ment options, suicide – these are topics

with which I have considerable lifelongfamiliarity – and consequently a deepsympathy for those afflicted by the dis-ease and for their families, who are alsoafflicted by it.

Secondly, my work with poor fami-lies in Romania has led me to suspectthat one of the most common reasonsthat poor parents often make “stupid”choices and are easily labeled “lazy” isbecause of severe but completely undi-agnosed depression.

“Depression cuts across class bound-aries… but most people who are poorand depressed stay poor and de-pressed… Poverty is depressing and de-pression is impoverishing, leading as itdoes to dysfunction and isolation.Poverty’s humility is a passive relation-ship to fate… The poor depressed per-ceive themselves to be supremelyhelpless. The rest of the world dissoci-ates from the poor depressed, and theydissociate themselves: they lose thatmost human quality of free will.”

Thus begins the chapter on poverty,which, like the others, ranges fromtouching personal narrative to a sum-mary of the scientific research and im-plications for policy.

Thirdly, I believe more open discus-sion on the subject of depression andanxiety could have positive implica-tions in the Romanian workplace. I sus-pect these conditions are as prevalent inBucharest and Timisoara as in the aver-age American city – but information andaccess to treatment options, for any-thing less than a complete psychoticbreak, are practically unheard of. Treat-ment, whether through talking therapy,pharmaceutical means or a combina-tion of the two, can make all the differ-ence in the world to a person’s sense ofwellbeing – and directly affects one’sproductivity and relationships.

The Noonday Demon seamlesslycombines intimate personal stories withthe perspective of scientists, doctors,therapists, politicians and even philoso-phers. Winner of the National BookAward and finalist for the Pulitzer Prizein 2002, The Noonday Demon has beentranslated into 35 languages. My bilin-gual friends tell me the Romanian trans-lation by Dana Ligia Ilin is excellent.

Demonul amiezii: o atomie a depresiei, Humanitas Publishing House

The Noonday Demon: An Atlas ofDepression, Scribner. Available at Anthony Frost bookshop in Bucharest.

BOOK REVIEW

The Noonday Demon:An Atlas of DepressionAndrew Solomon’s bestseller on depression is nowavailable in a Romanian translation. Leslie Hawke re-views the book ahead of its local launch and warns ofthe implications of not talking about the condition.

14 CITYwww.business-review.eu

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FOUNDING EDITOR Bill AveryPUBLISHER Anca IonitaEDITOR-IN-CHIEF Simona Fodor JOURNALISTS Otilia Haraga - seniorjournalist, Simona Bazavan, Ovidiu Posirca, Oana Vasiliu COPY EDITOR Debbie Stowe PHOTO EDITOR: Mihai ConstantineanuLAYOUT Beatric e Gheorghiu ART DIRECTOR Alexandru Oriean

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ISSN No. 1453 - 729X

National Museum of Contemporary Art

Until November 30

SenzArt, dedicated to individuals suf-fering from visual and hearing impair-ment, aims to promote contemporaryart as a facilitator of communication ondifferent levels of perception and withvarious means of expression. The exhi-bition of interactive multimedia instal-lation includes: Mem-Non by Martin-Emilian Balint; Simte Pulsația! byCătălin Crețu; Poesia Domestica byMatthias Neumann in collaboration withCristina David; and FluO by PaulPopescu.

Mem-Non is an interactive environ-ment that combines principles of chro-matic mimicry found in nature withsynesthesia. Structured as a visualsoundscape, it offers visitors a multi-layered sensorial experience throughcomplementary perception.

The project Simte Pulsația! givessensory impaired individuals the oppor-tunity to “feel” and experience – bymeans of interactive art – dynamic, pul-sating processes and unconventionalaudio-visual spacing methods. A color-ful canvas of 88 shapes will be projectedonto the floor, while repetitive, pulsatingmusic is played over speakers. The au-dience can therefore experience a mul-titude of interactions between the audioand visual processes.

Poesia Domestica offers an investi-gation of architecture that excludes thevisual element. Following a condensedtrajectory of architectural production,the work is guided by the generic stepsof design and building: from site analysis,through design conception, develop-ment and building, and finally usage andhuman interaction with the space. Theresulting work emulates a domestic en-vironment in complete darkness, devel-oped in collaboration with a Bucharestresident who is blind. A series of dis-creet sounds will be played throughoutthe rooms, adding an aural element tothe environment.

FluO is a multi-sensitive water stringinstrument modulated by those inter-acting with it, emitting sound as thestreams of water are touched. It takesinspiration from the classical harp,which engages the user in an intimateand virtuous interaction. FluO, say thecreators, challenges the limits of sen-sorial perception through a technologi-cal metaphor that questions the inter-pretation of reality and the simplestnatural phenomena like gravity, gener-ating an ambiguity that takes the ob-server into an upside-down world, sim-ilar to the dream and fantasy worlds ofchildhood.

oana.vasiliu@business-review.ro

DON’T MISS

SENZART EXHIBITION

See hear: the Mem-Non project is structured as a visual soundscape

DEBBIE STOWE

Director: Jean-Pierre MelvilleStarring: Alain Delon, François Périer,Nathalie Delon, Cathy RosierOn at: Cinema Eforie, Sunday 8 June,16.00 and Wednesday 11 June, 20.00.In French, with subtitles in Romanian

A shabby Paris hotel room, an achinglybeautiful man lying on the bed smokingand a philosophical quote – what betterway for a French film to start? “There isno solitude greater than a samurai’s, un-less perhaps it is that of a tiger in thejungle,” reads the citation, attributed toThe Book of Bushido. C’est très profond,non? But the book is bogus, existingonly in the imagination of director Jean-Pierre Melville – a foretaste of the artful-ness of this atmospheric 1967 film noirstarring Alain Delon.

Delon has often been accused ofbeing a rather wooden actor, carvingout a career on the strength of his looksrather than his talent – a French KeanuReeves, si vous voulez. If there is anytruth in that, then the role of taciturn,inscrutable Jef Costello seems an idealfit. Delon plays a hot man – I mean, ahitman – cruising the streets of Paris ina sharp suit and a stolen car carrying outwetwork for local gangsters. He’s aidedand abetted by long-suffering girlfriendJane (Nathalie Delon) who provides himwith alibis for seemingly very little grat-itude or reward. Contract killers –they’re so inconsiderate.

But then one job gets complicated.

The cops – led by amiable inspectorFrançois Périer – are sniffing around Jef,his paymasters have stiffed him and awitness, nightclub pianist Cathy Rosier,is covering for him for unclear reasons.Zut alors!

In the nearly half-century since itsrelease, Le Samouraï has become a clas-sic and much-referenced work. Most re-cently, Ryan Gosling’s unforthcomingkiller in 2011’s Drive and GeorgeClooney’s expat assassin in 2010’s TheAmerican have been compared to thecharacter of Costello. The 1999 Jim Jar-musch crime-actioner Ghost Dog: TheWay of the Samurai, starring ForestWhitaker, paid even more overt tribute.And Michael Mann’s Heat (1999) sharesthe French-Italian noir’s compare-and-contrast approach to the cops andkillers.

Melville’s movie betrays interestinginfluences of its own: there’s a Hitch-cockian feel to the long wordless se-quences, tracking shots andmeticulously composed set pieces. Thestory also shares the British director’smisogynistic and marginalizing treat-ment of the female characters – eventhough the nightclub pianist is such apro that when a gun is thrust in her faceshe doesn’t miss a single note! But thenwomen rarely thrive in film noir.

As with Hitchcock, there are comictouches too. These come mostlythrough some dry one-liners, the lion’sshare of which goes to Périer, whosewryly affable approach to crime-fight-ing is juxtaposed with Jef’s deadpanstyle of crime-committing.

Mostly, though, Le Samouraï’s pleas-ures lie in its tense atmosphere, and thethrill of an exquisitely crafted film: theneat structure (Jef pays three visits tothe same nightclub, which demarcatethe story’s three acts), and the brio ofthe set pieces, including a suspensefulcat-and-mouse metro sequence.

The main characters’ motives,meanwhile, remain a mystery. Delon’sunreadable, unsmiling visage yields noclue to Jef’s innermost thoughts. It surelooks good, though.

debbie.stowe@business-review.ro

FILM REVIEW

Le Samouraï

Courtesy of M

NAC

Delon walk to freedom: wanted manJef Costello evades the Parisian police