“Economic relations between Spain and Romania increased at a steady pace”

By Agustín Navarro, Economic and Commercial Counselor, Spanish Embassy in Romania

The economic relations between Spain and Romania have increased at a steady pace during the last 10 years. This has been reflected both in the volume of trade between the two countries, in the increasing investments that Spanish companies have made in Romania during the recent years and in Spanish companies’ engagement in the projects that have to allow Romania to catch up with EU’s living standards. Spanish construction and engineering companies have also shown a growing interest in the modernization of Romanian infrastructures in sectors such as transport, water and others and its presence in the country has risen dramatically during the last three years.The flow of Foreign Direct Investment (FDI) of Spanish origin increased from barely €5 million in 2004 to €186 million in 2006, staying close to those levels for most of the following years. The stock of Spanish FDI in Romania increased to €958 in 2011, or 1.7% of the total stock of foreign investments in Romania, according to Rumanian statistics (National Bank of Romania), putting Spain in the 12th place as regards foreign investors in the country. Real estate, renewable energies, manufacturing or services are the main sectors where the investments have been addressed. We expect more investments to come in the future in sectors of renowned Spanish expertise, such as wind power, photovoltaic power, automotive components, among others. In 2011, Romania’s and Spain’s bilateral trade peaked to €2.145 billion, after a low of 1.497 during the implosion of global trade in 2009. Spain’s exports reached €1.276 billion and Romania’s €869 million. From January to July 2012, Spain’s exports amounted to €631 million, 17.5% less than during the same period of 2011, whereas Romania’s were worth €463 million, or 2.8% less that the same period of the previous year. Our bilateral trade can be labeled as mainly intra-industrial, with several sectors being among both Romania’s and Spain’s most important ones. Such is the case of mechanical machinery, vehicles and their parts, electric materials, iron and steel manufactures, textiles and pharmaceutical products. On the other hand, sectors such as meat, plastics and other chemicals are more important for Spain’s bilateral exports than for Romania’s, whereas other sectors such as cereals, rubber manufactures, furniture and footwear are more important on the Romanian side of our bilateral trade, even if some of these are among Spain’s traditional export sectors, overall. The participation of many engineering and construction Spanish companies in the development of infrastructures financed via EU cohesion and structural funds is of increasing importance. Around EUR 2.3 billion were awarded to Spanish companies through tenders in Romania since year 2000, mostly in the transport sector, engineering, and water treatment plants as well as some other projects in agriculture, training, social services, consultancy, etc. In 2011, awards peaked to €700 million, of which €611 million in the transport sector and 60 in the water sector. In 2012, so far, Spanish companies have been awarded €181 million, of which€122 million in transport and 52 in water.The experience gained by Spanish construction and engineering companies during the last 20 years in the development, finance and management of infrastructures in Spain and abroad can be used for the benefit of the development of the Romanian infrastructures. In this respect the Foundation for the Spanish Railways is jointly organizing with CFR a seminar on railway infrastructure from October 17th to October 19th. Let me conclude by saying that the difficult economic context in Spain, with the highest unemployment rate of the EU, forces Spanish construction and engineering companies to look for contracts abroad. Considering the need for infrastructures in Romania, the existence of EU resources for its financing, the successful experience of Spain in developing a modern network of infrastructures during the last 20 years and a 900,000 strong labour force of Romanians in Spain, it is a good opportunity for Romania to build on our experience and at the same time to contribute to the welfare of its nationals living and working abroad.

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