June
2008
COUNTRY FOCUS - SWEDEN
 
Vol. 4 No.5  
 

Justice failures undermine EU integration

Romania’s 18 months in the EU have been unsuccessful due to its failure to reform the justice system, argues Swedish Ambassador Mats Aberg
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Swedish Ambassador to Bucharest Mats Aberg believes that Romania’s accession to the EU cannot be considered a success, especially due to its lack of implementing justice reforms.
“What the President of the European Commission Jose Barosso said last year in a speech held at the Romanian Parliament - that Romania and Bulgaria’s entry in the EU is a success story - is bullshit,” Aberg tells The Diplomat.
He believes that the Romanian Parliament needs to push harder for reforms, including tackling high-level corruption and placing the origin of public figures’ wealth under scrutiny.
“This Parliament should not try to stall the reforms in order to protect its own interests or the interests of some groups,” says Mats Aberg.
But the Swedish diplomat shows confidence in the new Minister of Justice, business lawyer Catalin Predoiu, especially due to his ‘outsider’ status from the main governing party machine.
“He is doing the same good job as former Minister of Justice Monica Macovei,” he adds, “but using different means and considering the tricky political situation in Romania, this non-political way of handling the judicial system might be more efficient.”
This July, the European Commission is due to issue its report on justice reform in Romania and the country risks harsh penalties. The failure to meet conditions outlined in Romania’s EU Accession Treaty could unleash a ‘safeguard clause’ on justice. This means EU member states will no longer automatically recognise judgments made in Romanian courts. This will have little effect on Romanian justice internally, but could damage any relationship EU countries and investors have with the latest member state.
“It is definitely possible for the safeguard clause to be enacted in July, but such a decision would cause a lot of trouble for the EU,” Aberg says.
To avoid this, Romania must set up an agency to monitor the wealth declarations of public figures, such as members of parliament. But the so-called National Agency for Integrity (ANI) is not functional.
The European Commission also requires Romania to build on non-partisan investigations into high-level corruption cases. But no major public figure accused of such graft currently faces trial.
Aberg adds that institutions such as the National Anti-corruption Department and the General Prosecutor’s Office have not been able to perform, because they depend on a political environment which lacks the will to reform.
Romania’s EU failures could have two effects on future accession waves. One could be that it downgrades the standards for the states waiting to join the club. Conversely the Romanian example could strengthen the arguments of Euro-sceptics, who believe further EU enlargement should stop. “That is why all EU members states, but I can only talk in the name of Sweden, should cooperate to help Romania,” Aberg says.
In Romanian politics, the Ambassador believes parties must return to restating the principles of their doctrines. “I was talking to an influential Romanian politician, who was saying that his party should reform itself,” adds Aberg. “I said: why not start with the ideology? But when he suddenly gave me this look, I understood that he did not like what I said.”

Russian lessons

Also Swedish Ambassador for the Republic of Moldova, Aberg is an expert on the ex-Soviet space. Most of his 45 years of diplomatic experience were spent dealing with the Russians. Romania has an unsteady relationship with the Russian Federation. Asked for advice on how the country can better deal with the situation, Aberg says: “Russians are unpredictable and that is why nobody knows what would be the best approach regarding Russia. There are Russians that I know who would be happy to see Russian influence increase by any means to what it was before 1989. This is what should be kept in mind when policies are decided. Russian diplomats usually act like they represent a superpower and don’t have to explain themselves or take anyone’s views into consideration. Russians are arrogant, but one should not bow one’s head in front of them, because they don’t respect weakness. If one shows too much weakness, all is lost. Russian policy-making always negotiates from a point of strength, but once they reach an agreement, they stick to it. Honesty and seriousness are necessary when dealing with Russia.”

Interview by Ana Maria Nitoi

Travel sector begins interest

This year the Swedish Rezidor Group, which manages the Radisson SAS hotel on Calea Victoriei, and Scandinavian airline SAS have entered the market. In retail, Ikea operates as a non-Swedish owned franchise in Romania, but high street retail giant H&M has not yet opened a store.
“Romania is becoming a more important country for Swedish retailers,” says trade commissioner of Swedish Trade Council Exportradet Romania, Jan Kettnaker. “But this is primarily a consequence of increased living standards in the country and therefore demand rather than the fact that Ikea has opened a store.”
The products sold in both Ikea and H&M are manufactured in Romania and the country is still a target for Swedish textile companies. But these firms prefer to buy from local Romanian suppliers rather than through setting up fully-owned factories.
One of the main reasons for Swedish investors not choosing Romania for a site for manufacture, according to Kettnaker, is its distance from Sweden and the main markets in west Europe. Due to proximity, Swedish investors have favoured their Baltic neighbours when looking for new locations in eastern Europe.
“However, many central and eastern European countries closer to Sweden have become expensive to produce in and therefore Romania and Bulgaria become attractive,” he adds.
The Swedish are increasing their interest in export to Romania in their specialist domains including machinery, vehicles, technical equipment and IT. On the purchasing side, Swedish companies are looking for supplies in the metal, plastics, wooden and textile sectors.
“However, given the broad economic growth in Romania across virtually all sectors of the economy, even Swedish niche-players experience good business opportunities in the country,” says Kettnaker.

Rezidor: opening in ski
resort in 2009

Swedish Rezidor Group is now managing the five-star Radisson SAS Hotel located on Calea Victoriei. When fully open, the hotel will consist of 424 rooms, four restaurants and 12 conference rooms.
Another Radisson Resort Hotel is due to open next year in the mountain resort of Poiana Brasov, which will include 186 rooms, two restaurants, conference rooms and a spa. The Rezidor Group is also looking at cities such as Cluj-Napoca, Timisoara and Constanta to build hotels in the next ten years, says Torbjorn Bodin, general manager of the Radisson SAS.

Rezidor Hospitality
■ Managing the Radisson SAS Hotel on Calea Victoriei, Bucharest
■ Opening the Radisson Resort Hotel in Poiana Brasov, 2009

ABB: expanding its
service branch

Swiss-Swedish engineering company ABB, which provides power and automation technologies and maintenance, has witnessed large growth in the last year.
The group’s local turnover in 2007 has increased by 45 per cent on 2006 and the company expects a 20 per cent growth this year. In 2007 ABB also increased its employees by 60 per cent to 100.
Transelectrica, OMV and Mittal Steel Galati are its main customers, but the company also works with state-owned energy companies such as Electrica, Termoelectrica, Hidroelectrica, Nuclearelectrica, gas distributor E.On and aluminium producer Alro Slatina. “We consider our customers our partners because the kind of services that we offer are based on a long-term relationship,” says country manager of ABB Romania, Peter Simon.

ABB Romania
Engineering company

Power and automation technologies
■ Turnover 2007: over 100 million Euro
■ Employees: 100

Electrolux: Romanian consumer demands mature

In the home appliances market, Romanian consumers are no longer choosing products based on price, but are looking for eco-friendly items with time efficiency gadgets, argues Carmen Georgescu, marketing and communications manager at Electrolux.
“The tendency on the home appliances market is towards built-in home appliances, integrated in the kitchen furniture,” she adds.
The company invested 1.43 million Euro last year in the upgrade of its Satu Mare plant, including in new technologies, improvement of the work conditions and a restructuring of the management system.
This year the company launched its Maximus vacuum cleaner and the Anti-fingerprint refrigerator and will also bring the intelligent oven Inspiro by the end of this year. The electric cooker, steam oven, time management washing machines and Britta and Drink’s Express refrigerators were the best-selling Electrolux products in 2007.

Electrolux
Home appliances and appliances for professional use manufacturer

■ 2007 turnover:151 million Euro
■ Brands include: Zanussi, AEG
■ Investments in Romania: 32 million Euro

By Ana Maria Nitoi, Corina Ilie and Michael Bird


 
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