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How could Russian investment in Romania be affected by the statements of president Basescu

The statement of president Basescu according to which he would have ordered the troops to cross the Prut in 1941 provoked a reaction on the part of the Russian Foreign Affairs Ministry which called them as an unjustified validation of the act which led to the death of 27 million Russians. Which is the impact of the diplomatic dispute on the economic relations between the two countries ?

« The impact was so strong for the Russian spirit, but the answer of the Russians was an emotional one and not rational (..) As you taint this spirit, everything gets an « Ir » : irreconcialable and irrevocable’ considers Ionel Blanculescu, financial consultant and former minister in the cabinet of Adrian Nastase. According to him, the relations between Romania and Russia were compromised by the president’s statement, and the effects at the economic level will be felt at macro level, not micro, where the political influence is not so important. « If any Romania interest crosses any Russian interest, certainly that interest will be boycotted by Russia, but we will know where it comes from », Blanculescu said.
Romania was not chosen by the big investors of Russia and from now on the variant of new entries is improbable, the analyst considers. « They ( investors) get approval to come to Romania, nothing moves without the political. (..)In principle, we will not get Russian investment in Romania » Blanculescu said.
As regards the big companies already present on the local market, the control of Russian state is total both as strategy and the economic tactics. In Romania, the Russians control the big companies in key-domains, such as metallurgy – Mechel, Vimetco, energy – Lukoil, WIEE and capital market – investment banks Renaissance.

Lukoil oil company is present on the Romanian market since 1998, when they bought the Petrotel refinary in Ploiesti. Lukoil activates on the market of fuel distribution in a network of 310 stations, such as that of electricity distribution, in an energy group inaugurated on the Petrotel platform, where there are 2,500 employees. The company controls 19% of the Russian production of oil.
Mechel siderurgy group got on the Romanian market in 2002 and has almost 7,000 employees in Mechel Campia Turzii, Mechel Targoviste, Ductil Steel Otelu Rosu, Ductil Steel Buzau, Laminorul Braila and Mechel Reparatii Targoviste.
Vimetco, on the local market in 2002 has the Alro group, aluminium producer with 2,500 employees. The company controls Conef Gaz, intermediary for Russian gas import.
WIEE, controlled by the Russians from Gazprom and the Germans from Wintershall is the biggest intermediary of gas on a local plan. Romania does not import gas directly from Russia starting with ’90 which led to the increase of tariffs to end users.
A most recent entry on the Romanian market is that of investment bank Renaissance Capital, controlled by the NewZealander Steven Jennings and the Russian Mihail Prohorov. Renaissance will control the public bid from Petrom, programmed to take place this summer. The consortium made up of Renaissance, BT Securities, Romcapital si EFG Eurobank Securities got the bid organised by the Romanian state for the bid, worth 500 million euro.
Valentin Ionescu, former minister during Emil Constantinescu, at present management consultant, stated that Russia statement « over the diplomatic language » showing that the relations between the two countries over the last ten years.
The analysts explained the fact that Russia was troubled by « some lack of political cooperation » on the part of Romania, in the context where Moscow did not modify the foreign policy since ‘80s. « Russia tried to exercise and some political influence in the states where they go (...) Russia does not separate political cooperation and economic cooperation » Ionescu says.
On a short term, the statements of president Basescu could lead to the increase of price for import gas, especially on the part of Russia, which covers almost 30% on the consumption at national level. The officials of the national authority of regulation in the domain of energy (ANRE) announced the imported gas tariffs of Russia could be increased by 15% in the Q3 from 400 dollarsthousand of cubic metres, to 460 dollarsthousand cubic metres, according to Mediafax.