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December 8, 2021

Uncertainties loom on privatization money route

Senate Speaker Mircea Geoana asks the PM for correct information on the final destination of the money obtained from privatizations.

Romania’s Premier Emil Boc announced changes in the destination of privatization money, which will no longer be injected into investments but will be used for paying the public debt instead. This means that the sum from the sale of the 9.84 per cent stake the state holds in Petrom will be used to pay the public debt, HotNews cited the PM as saying Tuesday. This means more money will be available for investments, Boc said, trying to demonstrate that privatization money will still go, though indirectly, into investments after all. At odds with Premier Emil Boc’s statements, the Economy Ministry informs that the “destination of the sums obtained from privatizations is that established by Government Emergency Ordinance (OUG) no 113/2006 on the founding of the National Development Fund, with the consequent amendments and completions”. Hence, the sums should be used, under law, for investments, though there is a precedent for money having an altogether different destination.

None of the Government officials were able to clearly explain what this money was spent on during 2007-2008 <electoral interval>. What is sure though is it didn’t go into investments. The Court of Audits too learned that the mo­ney in the Fund had not been distributed where originally planned.

Senate Speaker Mircea Geoana addressed a letter to the PM which says that Parliament did not have a say on the pledges Government made over energy sector privatizations, which is intolerable, Mediafax reports. The letter reads as follows: “I definitely ask you to provide the Legislative Body with full and fair information on the final destination of the privatization funds”.

Geoana reminds in the letter that the trading began Monday on the Bucharest Stock Exchange of 9.84 per cent of Petrom shares, with the privatization agreement stipulating a further 8 per cent of the shares will be sold to employees. “This means the Romanian state will only be left with 2.8 per cent of the Petrom shares, which is not only Romania’s largest company but also the holder of the majority of the crude oil and natural gas deposits in this country,” Geoana writes.

The Senate Speaker wonders whether Romania is in a situation similar to Greece’s, which has to sell its assets in order to get cash fast. “Why is it that the Romanian state chose to sell circa 10 per cent of the largest company in this country, in the current context of the energy market? Under circumstance wherein Petrom is valued at over EUR 5 bln on the stock exchange, the Romanian state is content with keeping less than 3 per cent of Petrom shares, which is odd, to say the least,” Geoana outlines in his letter to Boc, reminding that, given the commitments Romania has already made, under the letter of intent with the International Monetary Fund (IMF), the state will also sell 20 per cent of its stake in CFR Marfa, up to 20 per cent in Tarom, 9.84 per cent in Petrom, 15 per cent, Transelectrica, Transgaz and Romgaz, and at least 10 per cent of Hidroelectrica and Nuclearelectrica”. This means the Romanian state will have substantial amounts of money available from the privatization process. The key question is, what is going to happen with this money? It is Government’s responsibility to offer a transparent plan on how this money will be spent, given this is taxpayers’ money after all,” Geoana emphasized.

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