Interview by Camelia Cusnir
Even if statistics show a steep decline in overall foreign direct investment, French investment fares rather well. According to the French Embassy’s Economic Service, French companies are waiting for the signs or economic recovery and are especially interested in the resumption of energy and transport infrastructure works.
What is the current level of French investment in Romania and what fields of activity could be more interesting for French investment in the medium- and long-term? What is the level of trade between the two countries?
French Embassy’s Economic Service: As you already know, it is difficult to quantify the total of foreign investment in Romania. National Bank statistics do not reflect the reality of investment flows, especially given the fact that French investments via The Netherlands were not taken into consideration, for fiscal reasons. This fact makes The Netherlands the largest investor in Romania in the statistics, while France ranks fourth, with a total FDI of EUR 4.26 bln in 2009.
According to our own estimates, France would actually be the third largest foreign investor in Romania, with investments of about EUR 7 bln, after Germany and Austria.
Today, French companies are waiting for clear signs of economic recovery. They are particularly interested in a resumption of energy and transport infrastructure works and wish to take part in the EU fund absorption process, thanks to their expertise in organizing such projects.
In what regards foreign trade, our bilateral exchanges have reached the record sum of EUR 5.5 bln in 2010, after a growth of 23 per cent (according to French customs). France was thus able to strengthen its position as Romania’s third largest trade partner.
After the crisis, which has of course affected our bilateral trade (an 11 per cent drop in 2009), French exports to Romania have been resumed at a slower pace than imports from Romania: even so they have increased by 15.1 per cent in 2010, reaching EUR 2.51 bln. At the same time, Romanian exports to France, supported by the success of Dacia and especially the Duster model on the French market, have grown by 30.4 per cent, reaching EUR 2.99 bln. Thus, the trade balance between our countries has been reversed: from a EUR 452 M surplus in 2008, France has moved to a EUR 486 M deficit in 2010.
According to data released by Romanian authorities, FDI in Romania has constantly decreased over the last couple of years. What was the evolution of French investments?
French Embassy’s Economic Service: Despite the crisis, new French investors continue to show a significant interest in the Romanian market in 2011, which is proven by the recent launch of the Romanian branch of AXA (AXA Asigurari) on the life insurance market and also by the expected opening of the first Leroy Merlin DIY store in Romania in August. French companies have therefore kept their confidence in Romania and it is worth mentioning that those already present here before the crisis have continued to invest, even if at a slower pace than before, in wide-scale projects such as Renault Dacia’s RTR test centre at Titu, inaugurated in September last year by President Basescu. We must also mention continued investment in network development, done by companies such as Veolia (Apa Nova), GDF-Suez or Orange, for the comfort and security of Romanian consumers.
Romanian authorities say recession has ended, after two years of crisis. Judging by the signals you received, have French companies in Romania also begun to feel the effects of the end of the crisis?
French Embassy’s Economic Service: French companies have the advantage of being present in all key sectors of Romanian economy, as leaders on their markets. Thus, they give interesting feedback on economic developments. Nowadays, our companies have contrasting views on the end of recession announced by two consecutive quarters of economic growth:
Companies whose activities are concentrated in foreign markets have had good results in these last two years, but they are worried about a slowdown in relation to their main customer countries (eurozone),
Companies connected only to the Romanian market (distribution, fast moving consumer goods) do not generally see an actual recovery on a highly competitive market. There is however some movement in what regards consumption, visible through certain events, such as the resumption of consumer crediting. But, regardless of their perceptions, our companies are determined to take part in re-launching the country’s economy.