Romanian Competition Council blames the system for EC's investigation into three privatization cases

The Romanian legislation stipulates a privatization commission to conduct negotiations which are secret until the deal is clinched. All the cases investigated by the EC have the same pattern and it is all because of the Romanian privatization system, Competition Council head, Gheorghe Oprescu said. “The negotiation result is made public in the end when nothing can be changed. This arises the Commission's suspicion,” Oprescu said.

The Competition Council is still providing EC information regarding the privatization of Automobile Craiova.

EC decided to start an investigation on the possible state aid granted by government to Automobile Craiova, referring to a certain number of jobs the new owner, Ford would create at the plant. The EU body issued an order asking Romania to suspend any state aid that was not notified to the authorities in Brussels.

The government endorsed a special law for selling the company which wrote off the plant's debts, both to the state and coming from contracts of former owner, Daewoo. EC voiced concern over the conditioned auction which might had led to a smaller price involving, therefore, a state aid. The conditions referred to maintaining a certain level of production so the allegedly aid could support the plant.

The EC started similar investigations over a possible state aid granted to Petrotub Roman before the company was sold to Mittal Steel. Romania erased a 26 million euro debt Petrotub had towards the state. Mittal Steel Roman will have to return the money if the European Commission decides the debt waiver was illegal. The company was privatized in 2003.

The European institution also analyzes the sale of Tractorul to Flavus Investmetns in July this year for 77 million euros, without VAT.
EC is to decide if this can be seen as state aid, Oprescu said, adding Romanian authorities imposed certain conditions concerning the privatization, including keeping the same core activity for the next ten years. EC says such measures could have led to a sale below the market value, which would also include state aid.

Source: NewsIn