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February 28, 2021
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Romania’s potential as an emerging economy in the EU is enormous

interview with Mr. Arnulf Gressel, Commercial Attaché of the Commercial Bureau of the Austrian Embassy to Bucharest

2012 represented for many a year of living with the phenomenon called crisis and its effects. To what extent was trade between Austria and Romania affected last year and what are the estimates on its value this year?

Trade between Austria and Romania continued to grow in 2012. Austrian exports to Romania grew by roughly 5%, establishing Romania as the most important market for Austria in South East Europe. With this growth, Romania is also overtaking Spain and the Netherlands in terms of Austrian export markets. Romanian exports to Austria in 2012 are also stable, and considering that they have surpassed pre-crisis level already in 2010, it can be stated that both economies are recovering steadily.

Considering that the international context is still difficult from an economic and financial standpoint, where to you put, on a scale of 1 (the lowest) to 5 (the highest), Romania’s business potential as an emerging country and how friendly, legislatively and juridically speaking, is the local business environment?

Romania’s potential as an emerging economy in the EU is enormous. However Romania faces several challenges. There are several aspects of law that could be improved or revised. Rule of law as such, efficient commercial courts, a more practical insolvency law, an accurate and transparent land registry, efficient tax administration and transparent public procurement are among the issues foreign investors and entrepreneurs find most impeding when doing business in Romania. Though basically it all comes down to transparency and efficiency of public administration. Also it is crucial that Romania makes better use of EU funding. Again this requires an effective and efficient public body to facilitate the utilization of these funds.

On the Romanian map, which are the regions on which Austrian businessmen focus their attention and what sectors were the most dynamic in recent years?

Region wise, Transylvania, with its common history and good language capacities attracted a large portion of Austrian investment in Romania. Bucharest, as the nation’s capital, of course makes an excellent headquarter for Austrian businesses investing in Romania. However, Austrian investments can be seen all over Romania, recently particularly in the coastal areas and along the river Danube, due to logistical advantages and natural resources (wind).The energy sector, be it renewable energy or oil and gas, has seen a lot of investment from Austria. OMV, the biggest Austrian investor in Romania, invested roughly seven billion EUR in the market. The green certificate system has attracted a lot of investors in the renewable energy sector. Rumors of upcoming alterations of this system due to higher energy prices have irritated investors, who rely on the green certificates to redeem their large investments. An alteration of this system would be quite a breach of trust towards investors. The green certificate system as it is now allows certain flexibility in order to meet changing market environments; it would be a hasty reaction to overthrow this system.

Austria remains one of the most important investors in Romania. From the data you currently have, how many companies with Austrian capital are active in Romania and which are the top five investors?

Currently there are 6,452 companies in Romania who have registered capital from Austria, though of those companies, roughly 1.000 are active large investors. The biggest investor is OMV/Petrom, further large Austrian investments can be found in the banking and insurance sector: Erste Bank/BCR, Raiffeisen Bank, Volksbank and Vienna Insurance Group, or in the construction industry: Strabag, Porr, Alpine, or companies of wood processing, like Schweighofer, Kronospan or Egger.

 

Given the maturity with which it treats problems concerning economic development and more, for many Austria represents a business model. What exactly from the Austrian investment experience can be applied in Romania too?

Economic development requires a stable political environment, an efficient and transparent administration and a reliable and effective legal system. Here Romania still has improvements to make.Another topic where we see increasing demand from investors is skilled labor. Here the Austrian system of dual education could prove a helpful model for Romania. A highly trained skilled labor force is a substantial competitive advantage for a market to attract investment and to increase the value added of local businesses.

 


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