RESTRICTEDWORLD  TRADE
ORGANIZATIONWT/TPR/S/60
3 September 1999
(99-3578)
Trade Policy Review Body
TRADE POLICY REVIEW
ROMANIA
Report by the Secretariat
This report, prepared for the second Trade Policy Review of Romania, has been
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has,
as required by the Agreement establishing the Trade Policy Review Mechanism
(Annex 3 of the Marrakesh Agreement Establishing the World Trade
Organization), sought clarification from the Government of Romania on its trade
policies and practices.
Document WT/TPR/G/60 contains the policy statement submitted by the
Government of Romania.
Note: This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on Romania.Romania WT/TPR/S/60
Page iii
CONTENTS
Page
SUMMARY OBSERVATIONS
(1) O VERVIEW vii
(2) M AIN ECONOMIC DEVELOPMENTS AND OUTLOOK , 1993-99 vii
(3) I NSTITUTIONAL DEVELOPMENTS :  1993-99 viii
(4) D EVELOPMENTS IN TRADE AGREEMENTS viii
(5) T RADE AND TRADE -RELATED POLICY DEVELOPMENTS ix
(6) S ECTORAL DEVELOPMENTS xi
I. ECONOMIC ENVIRONMENT 1
(1) B ACKGROUND 1
(2) R ECENT ECONOMIC DEVELOPMENTS 2
(i) Macroeconomic indicators 2(ii) Monetary and exchange rate policy 4(iii) Fiscal policy 5
(3) M
AIN STRUCTURAL DEVELOPMENTS 6
(i) Trade liberalization 6
(ii) Price liberalization 7(iii) Foreign investment 7(iv) Privatization 8
(4) O
UTPUT AND TRADE TRENDS 8
(i) Sectoral composition of output 8
(ii) Composition of trade 9
(iii) Direction of trade 11
(5) O UTLOOK 11
II. INSTITUTIONAL FRAMEWORK FOR THE TRADE POLICY REGIME 13
(1) O VERVIEW 13
(2) G ENERAL CONSTITUTIONAL AND LEGAL FRAMEWORK 13
(i) Parliament 13(ii) The President 14(iii) Government 15(iv) Judiciary 18
(3) G
OVERNANCE 19
(i) Overview 19
(ii) Transparency 19(iii) Consultation of the public on policies 19(iv) Civil service reform 20(v) Stability of the framework for economic operators 21
(4) I
NTERNATIONAL AGREEMENTS , CONVENTIONS AND TREATIES 22
(i) Negotiation, elaboration and ratification of agreements in Romania 22
(ii) WTO 22(iii) European Union 26(iv) Regional trade agreements and arrangements 28(v) Black Sea Economic Cooperation (BSEC) 31(vi) Bilateral trade and economic cooperation agreements 31WT/TPR/S/60 Trade Policy Review
Page iv
Page
III. TRADE POLICIES AND PRACTICES BY MEASURE 32
(1) O VERVIEW 32
(i) Trade in goods 32(ii) Internal measures 33
(2) M
EASURES DIRECTLY AFFECTING IMPORTS 33
(i) Registration and customs 33
(ii) Customs clearance procedures 35(iii) Customs duties 38(iv) Taxes on products assessed at the border 42(v) Exemptions or reductions from customs duties and taxes 44
(vi) Customs commission 46
(vii) Import surcharge 46(viii) Tax avoidance and tax evasion 47(ix) Rules of origin 48(x) Prohibitions and products subject to licensing 49(xi) Sanitary and phytosanitary measures 50
(xii) Contingency measures 51
(xiii) State trading 51
(3) M
EASURES DIRECTLY AFFECTING EXPORTS 51
(i) Duties and taxes 51(ii) Drawback 51(iii) Prohibitions and products subject to licensing 52
(iv) Export promotion 53
(v) Export subsidies 53
(4) I
NTERNAL MEASURES 54
(i) Business framework 54(ii) Investment regime 58
(iii) Protection of intellectual property rights 62
(iv) Technical standards and regulations 69(v) Competition policy 71(vi) Government procurement 77
IV. TRADE POLICIES BY SECTOR 79
(1) O
VERVIEW 79
(2) P RIVATIZATION AND ENTERPRISE RESTRUCTURING 80
(3) A GRICULTURE , INDUSTRY AND SERVICES 83
(i) Agriculture 83(ii) Industry 87(iii) Services 92
REFERENCES 99
APPENDIX TABLES 103Romania WT/TPR/S/60
Page v
CHARTS
Page
I. ECONOMIC ENVIRONMENT
I.1 Real effective exchange rate index and quarterly changes, 1992-98 5
III. TRADE POLICIES AND PRACTICES BY MEASUREIII.1 Patent Grant Procedure 66
TABLES
I. ECONOMIC ENVIRONMENT
I.1 Selected macroeconomic indicators, 1992-98 3
I.2 GDP by origin, 1992, 1997 and 1998 9I.3 Private sector ownership in GDP sectors and selected activities, 1992-98 9
I.4 Composition of exports, 1992-98 10
I.5 Composition of imports, 1992-98 10
I.6 Direction of trade, 1992, 1997 and 1998 12
II. INSTITUTIONAL FRAMEWORK FOR THE TRADE POLICY REGIME
II.1 Government ordinances by type, 1992-98 16
II.2 Selected WTO documents of Romania, 1995 to June 1999 25
III. TRADE POLICIES AND PRACTICES BY MEASUREIII.1 MFN and preferential tariffs, simple averages, 1999 40
III.2 Tariff rate quotas on agricultural products from WTO Members, 1999 42
III.3 Temporary customs duty exemptions subject to quotas, 1998 42III.4 Combined rates of customs duties, import surcharge, customs commission,
excise taxes and VAT on selected products, 1999 47
III.5 Revenues collected at the border, 1992-98 48III.6 Number of tariff lines (HS 8-digit) subject to export prohibition, quantitative
restriction or automatic licensing, 1996-99 52
III.7 Incorporations by form of business organization, 1991-98 55III.8 Granted patents, 1992-98 67III.9 New Romanian standards, 1995-98 70III.10 Cases registered at the Competition Council, 1998 75
IV. TRADE POLICIES BY SECTOR
IV.1 Market privatizations of state-owned commercial companies, 1992-96 81
IV.2 Bankruptcy proceedings for commercial companies under the management of the
State Ownership Fund (SOF), 1994-98 83
IV.3 Structure of agricultural production, 1998 84
IV.4 Crop distribution on arable land, 1989-98 86WT/TPR/S/60 Trade Policy Review
Page vi
APPENDIX TABLES
Page
III. TRADE POLICIES AND PRACTICES BY MEASURE
AIII.1 Statutory and MFN tariffs, 1999 105
AIII.2 Simple average tariffs applied under preferential arrangements, by HS Chapter
and source of imports, 1999 108
AIII.3 Tariffs on imports of select ed non-agricultural products from
the European Union, 1999 110
AIII.4 Tariff rate quotas on imports from preferential origins, 1999 113
AIII.5 Excise taxes on imported products, by tariff item, 1999 116
AIII.6 Reduced VAT rate categories for products, by tariff item, 30 March 1999 120AIII.7 List of raw materials subject to VAT suspension, 1999 121AIII.8 Membership of multilateral environmental agreements with trade provisions 123AIII.9 Bilateral investment and tax treaties concluded by Romania, June 1999 124AIII.10 Developments in the investment incentive, 1991 to June 1999 126
AIII.11 Membership of international conventions in the field of intellectual property 129
IV. TRADE POLICIES BY SECTORAIV.1 Comparison of industrial branches, 1997 130Romania WT/TPR/S/60
Page vii
SUMMARY OBSERVATIONS
(1) OVERVIEW
1. Romania's transformation to a market
economy began in December 1989 in a very
difficult economic, social and political context,with little history of market-based economic
reform.  The regime in power throughout the
post-war period nationalized land and
industry, and instituted strict central control of
economic decisions.  By the time of its firstTrade Policy Review in December 1992,
Romania was in a severe recession, facing an
incipient balance-of-payments crisis, provoked
in part by the collapse of trade within the
Council for Mutual Economic Assistance(CMEA).  The shift to the private sector had
begun, however, with Romania liberalizing
trade, prices and the exchange rate.  Romania
had also established the regulatory
foundations for a market economy, provided
open and liberal access to foreign investors,
and had begun restructuring state-ownedenterprises.
2. Almost ten years into the transition,
Romania's second Trade Policy Review
provides an opportunity to assess the progress
to date.  Romania has maintained its liberalinvestment regime and completed the
regulatory framework for private sector
development.  The initial progress on trade
liberalization has been anchored in binding
commitments under the WTO and regionaltrade agreements.  Price and exchange rate
liberalization is complete.  Unfortunately,
Romania has had more difficulty in completing
the shift to the private sector of state-owned
enterprises, still dominant in industry andfinancial services.  Privatization remains the
preferred option, rather than closure, and
policy is consequently geared mainly to the
objective of keeping enterprises open and
rescuing failing banks.  This priority has made
it difficult to finance worker adjustment
programmes to ease closure, and alsocomplicated other goals of government policy,
such as maintaining social services, renewing
the infrastructure or reducing the tax burden
on small and medium-sized enterprises.3. In 1999, Romania is experiencing its
third consecutive year of recession.  Industrial
production continues to drop and real net
exports are down.  The persistent and growing
current account deficit of recent years has
been financed mainly by an accumulation ofshort-term external debt;  foreign direct
investment inflows have been disappointing,
although on an improving trend since 1996.  A
difficult debt-management situation in 1999 is
compounded by the repercussions of theRussian debt crisis and the conflict in Kosovo.
Romania is discussing financial support for its
adjustment programme with multilateral
financial institutions.
(2) M
AIN ECONOMIC DEVELOPMENTS
AND OUTLOOK , 1993-99
4. In spite of the more difficult external
environment resulting from the collapse of
CMEA trade and payments arrangements,
Romania's merchandise exports recovered
early, in mid-1992, supporting industrial
production and real income.  Growth occurredmainly in state-owned enterprises.  Substantial
real wage growth undercut the
competitiveness of Romania's exports and
fuelled an import boom.  The current account
deficit increased from 1.7% of GDP in 1994 to6.6% in 1996.  The deficit was financed mainly
by accumulating external debt, up 50% in
1994-96, as foreign direct investment
remained low.
5. After the 1996 change of Government,
Romania renewed its efforts at structural
reform and macroeconomic stabilization,
supported by multilateral financial
institutions.  Fiscal and monetary policies
were tightened and real GDP fell 6.9% in1997.  Net exports rose and the current
account deficit fell slightly.  The political
resolve to sustain the reform programme
weakened in the autumn 1997, and looser
monetary and fiscal policies then prevailed.
The rate of inflation was 155%, partly
reflecting price measures due to the final stageof price de-controls in early 1997.WT/TPR/S/60 Trade Policy Review
Page viii
6. In 1998, policy priority shifted to
curbing inflation.  To give credibility to this
effort, the exchange rate was used as an
external anchor for price stability. Tight
monetary policy, in combination with an
unexpectedly expansionary fiscal policy, led tosharply higher real interest rates, contributing
to a drop of 7.3% in GDP.  Inflation declined
to about 40%. At the same time, the real
appreciation of the currency contributed to a
decline of 34.4% in real net exports, and thecurrent account deficit rose to 7.2% of GDP.
As an emergency measure, Romania
introduced an import surcharge of 6% in
October 1998, reduced to 4% for 1999;  it is
scheduled to be eliminated in 2000.  Followingconsultations, the WTO Committee on
Balance-of-Payments Restrictions concluded
that Romania's imposition of the surcharge
was in conformity with its WTO obligations.
7. In 1999, Romania has exercised fiscal
constraint and accelerated privatization, both
to raise revenue and foster structural reform.A reduced budget deficit of 2.5% is targeted
for 1999, two-thirds of the level of 1998;  the
elections in 2000 however constrain the scope
for difficult economic policy decisions, should
they become necessary.  GDP is expected todecline by some 4% in 1999, inflation is
expected to remain modest, and the current
account deficit to drop to 5.5% of GDP.
(3) I
NSTITUTIONAL DEVELOPMENTS :
1993-99
8. The transition to a democratic system
was consolidated during the period under
review.  The first elections were held under the
new Constitution in 1992, followed by the
change-over of Government after the 1996elections;  elections for Parliament and the
Presidency are scheduled for the autumn
2000. The Government, which is chosen from
a coalition of political parties, proposes
legislative initiatives to Parliament and
implements the resultin g laws.  In Romania, no
law or government decision can be enforcedwithout publication. Romania intends to
respond to the challenge of more effective
governance by increasing public access toinformation, passing an anti-corruption law,
and  reforming the civil service.
9. A challenge for the authorities is the
need to establish a more stable and less
complex policy regime.  In recent years, the
Government has invoked the economic crisisto implement, through the instrument of the
"emergency ordinance", virtually all reform-
related initiatives in advance of legislative
approval.  Subsequently, Parliament has often
turned such initiatives into quite differentlaws, sometimes modified again by the
Government through an emergency ordinance.
The resulting to-and-fro between Romania's
political bodies indicates the difficulty of
establishing consensus on reform.  Foreconomic operators, a succession of measures
on key business-related areas – taxation,
investment, privatization – creates a volatile
and uncertain environment, increasing the risk
of doing business and discouraging
investment.  Greater stability of Romania's
policies in these key areas could moderate therisk of adverse developments for economic
operators, provide a more favourable regime
for investment and an anchor for further
structural reform.
(4) D
EVELOPMENTS IN TRADE
AGREEMENTS
10. Romania was a founding member of
the WTO in 1995.  All tariffs are bound at
ceiling rates, and Romania is eliminating
tariffs on products covered by the informationtechnology agreement (ITA).  Adding to its
Uruguay Round commitments on services,
Romania is a party to the WTO Agreements on
Financial Services and Basic
Telecommunication Services.  Romaniaactively participates in the WTO, regularly
notifying Members of policy developments.  In
particular, standards for intellectual property
protection and their enforcement were notified
in advance of 2000, when Romania's
transitional arrangements end, and reviewed
by the WTO Council for the Agreement onTrade-Related Aspects of Intellectual Property
Rights (TRIPS).Romania WT/TPR/S/60
Page ix
11. Romania also concluded free-trade
agreements with the European Communities,
EFTA, CEFTA, Moldova and Turkey.  For the
future, Romania's paramount national goal is
to join the European Union (EU), its most
important trading partner.  Accessionnegotiations have not begun, the European
Commission having urge d Romania to make
more progress towards satisfying the
conditions of membership.  Romania intends to
accelerate the pace of political and economicreform, as well as the transposition of the
acquis into domestic law.   The Commission is
supporting these efforts through an "Accession
Partnership", which identifies priority areas
for further work and eligible for financialassistance from the EU.
(5) T
RADE AND TRADE -RELATED POLICY
DEVELOPMENTS
12. The basic reform of the trade regime
was in place at the time of Romania's first
Review in December 1992:  the end of the
State's monopoly on trade, and the use of thecustoms tariff as the main instrument of
commercial policy.  During 1997-98, Romania
ended the practice, which had intensified in
1995-96, of temporary tariff exemptions
subject to quotas;  this practice had beenqueried at the first Review.  All remaining
quantitative restrictions on exports were
eliminated, replaced with automatic licensing
for statistical purposes.  No anti-dumping,
countervailing or safeguard measures havebeen taken under the WTO Agreements during
the period under review.
13. At the border, Romania levies customs
duties, an import surcharge (4% in 1999), a
customs commission (0.5%), specific orad valorem excise taxes on certain products
(including tobacco products, alcoholic
beverages, coffee, and automobiles), on top of
which a basic VAT rate of 22% applies.  Due
to the growing importance of indirect taxes in
government revenue (38% in 1998), priority is
given to the collection of taxes at the border.On excisable products, in particular, relatively
high levels of duties and taxes have
contributed to smuggling, customs fraud andallegations of improper conduct by customs
personnel.  In response, border controls have
been strengthened, although importers may
find the resulting customs procedures
complex, cumbersome or time-consuming.
14. The new Customs Code of 1997
unified the regime for importers and exporters
in a single framework, and approximated the
EU's Customs Code.  The principles of
customs valuation are largely the same.
Comparison values were used until 1998 forproducts subject to excise taxes, but were
replaced in 1999 with a database of prices.
Other features of the Code are the availability
of duty-suspension regimes (with the
authorization of Customs) to facilitate inwardand outward processing activities;  Romania
also has five "free zones".
15. Tariff policy on industrial products
has been stable.  Average applied MFN rates
have remained steady at 16%, well below the
bound level of some 35%.  Their scope of
application is narrowed by the free-tradeagreements with partners in the region, as
well as by GSTP preferences for developing
countries.  Romania's free-trade agreements
with the EU and EFTA require the elimination
of remaining tariffs on non-agriculturalimports from these origins by 2002;  this is
likely to lead to more intense competition on
the domestic market for sensitive products
such as footwear, textile and clothing
products, where tariff elimination was back-loaded.  On agricultural products, Romania
applied in mid-1995 the levels of MFN tariff
rates bound in its WTO Schedule.   Reductions
have been made on a temporary basis starting
in 1997, and largely maintained in 1998 and1999.  These reductions brought the simple
average applied MFN tariff on agricultural
products down to 33.9%, compared with an
average bound rate of 134.1%;  if the
authorities find it necessary, this gap leaves
ample room for tariff increases within
bindings, and may impart a certain degree ofuncertainty to the tariff system.
16. In spite of the importance of tax
collection to government revenue, a largeWT/TPR/S/60 Trade Policy Review
Page x
number of laws provide local enterprises with
exemptions from the payment of customs
duties and taxes collected at the border.  In
1999, exemptions were available under
various regimes for investment (notably for in-
kind contributions of equipment and vehicles),for products imported under leasing contracts
and for "complex" exports (notably plants and
ships).  Excise tax reductions apply to tobacco
products and motor vehicles produced with
local content.  The authorities have alsoperiodically used a tax incentive in an effort to
stimulate domestic production for export;  the
latest such measure, a reduction of 50% on the
tax on profits from exports of goods and
services, was in force in 1997, suspended in1998, reintroduced on 1 January 1999, but
suspended once again in March 1999 for
budgetary reasons.
17. The investment regime has been open
and liberal during the period under review,
containing guarantees against nationalization
or expropriation without sufficientcompensation. Key improvements in the
investment regime are external current
account convertibility and the principle of
equality between foreign and domestic
investors, thus establishing a uniform businessframework for all companies established in
Romania.   Foreign dire ct investment played
only a minor role in Romania's transition
between 1989 and 1996, with levels becoming
more significant only in 1997 and 1998.  Therelatively low level of foreign direct
investment to date is an obstacle to economic
development, in terms of the modernization of
the capital base and creation of jobs in the
private sector.
18. Romanian companies are subject to a
profit tax (basic rate of 38%), local taxes and
withholding taxes, as well as employee taxes
on wages (on average 23%), the latter in lieu
of a personal income tax.   At the same time,
profit tax holidays are available, in 1999, for
investment in disadvantaged regions, oil andgas exploration or designated investments of
at least $50 million with a major impact on
economic activity.  Small and medium-sized
enterprises thus carry a relatively heavierburden of taxation than large companies;
reducing their tax burden and simplifying the
regime would seem a priority to foster their
development.  Although the practice of
granting investment incentives is very
widespread among WTO Members, theircost-effectiveness in encouraging investment is
open to question.
19. Transposition of the acquis to
approximate the EU laws has been the driving
force of Romania's recent legislative effortsfor private sector development.  The EU
approach was used for the new framework on
regulations and standards.  Romania's
competition policy is also modelled on the EU
approach, although no corresponding law onstate aids exists.  A draft law is under
consideration by the Romanian Parliament,
however;  once in effect, it will facilitate an
inventory of state aids, on which
comprehensive information is not yet
available.  On government procurement,
foreign suppliers may participate in auctionsprovided Romanian suppliers are granted
reciprocity or if no domestic supplier is
available.  Within this framework, Romania
introduced a national preference of 20% in
1995, which was dropped in 1998, to morefully realize the benefits of competition and
achieve a better fiscal balance.
20. Under the Europe Agreement,
Romania made the commitment to provide by
2000 a level of protection of intellectualproperty rights, and a means of enforcement,
similar to that in the EU, and the process is
almost complete.  Romania has added to its
1991 Patents Law by, inter alia, new
standards for the protection of copyright,trade marks, industrial designs, topographies
of integrated circuits and new plant varieties;
a number of major international conventions
on the protection of intellectual property
rights have also been ratified.  Romania
intends to close the remaining gaps between
the domestic legislative framework and theTRIPS Agreement by passing a law to enforce
intellectual property rights at the border.
More effective enforcement remains an
outstanding challenge, mainly due to the lackRomania WT/TPR/S/60
Page xi
of resources necessary to investigate
infringements, and the diminished deterrent
effect of fines eroded by high levels of
inflation.
(6) SECTORAL DEVELOPMENTS
21. In spite of the considerable progress
made by Romania in laying the foundations for
the market economy, state-owned enterprises
still account for the major share of recorded
economic activity (estimates of the size of the
informal sector range from 25% to 60%).  Thecontinuing importance of state-owned
enterprises is a legacy of Romania's late start
on privatization, and also the relatively low
level of foreign direct investment.
Privatization effectively began only in 1995,and proceeded at a slower pace than
anticipated.  The trend improved in 1998 and
1999, also attracting higher levels of foreign
direct investment in Romania.
22. Agriculture has been important in
absorbing workers displaced in the course of
the transition.   The sector accounts for 42.3%of the active labour force – 3.8 million of a
total 9 million – but agriculture's share in
GDP is just 19%, reflecting low labour
productivity.  The sector has potential due to
the quality of the soil and the climate, bothconsidered to be the most favourable in south-
eastern Europe.   Productivity is affected by
the fragmented pattern of land tenure, with
millions of family farms on small plots,
cultivating mainly for subsistence.  Theefficiency of measures to support and protect
agricultural producers has improved during
the period under review due to the reduction
in MFN tariffs starting in 1997 and the use of
domestic support measures.   Privatizing statefarms and more competition in the provision of
inputs and in food processing will contribute
to the development of agriculture.  Romania
also has difficulty competing with products
heavily subsidized by trading partners, either
domestically or on world markets.
23. State-owned enterprises accounted for
about 55% of industrial production in 1998,
compared to 75% of industrial employment;privately held enterprises accounted for about
45% of production and 25% of employment in
industry.  The large difference in labour
productivity indicates the dichotomy between
the traditional basis for industrial activity in
state-owned enterprises and the dynamism ofthe emerging private sector.  The typically
large, energy-intensive state-owned enterprise,
employing thousands of  workers, contrasts
with the typically small and medium-sized
private enterprise (SME), using state-of-the-art technology.  Whereas the large state-
owned enterprises have difficulty in
maintaining and expanding export markets for
its product, the SMEs dominate the production
of garments, the most dynamic sector inRomania's exports and imports.  In addition to
private sector ownership, the development of
textile and clothing exports has benefited from
link-ups between Romanian production units
and companies in France, Germany and Italy.
The external environment also became more
favourable due to the elimination oflong-standing import restrictions by the
European Union and Norway;  Canada and
the United States are two potentially large
markets, but still restrict imports from
Romania.
24. The financial condition of state-owned
enterprises has deteriorated sharply in the
absence of market discipline.  Arrears to
suppliers and of wage taxes have built up, and
the volume of non-performing loans in thebanking system is significant.  The difficulties
in the banking sector have, in turn, limited the
access of the emerging private sector to
affordable credit, undermining its development
and capacity to create alternative employmentfor workers shed by state-owned enterprises.
Fiscal policy is burdened by the provision of
assistance to agriculture, industry, and banks,
compromising the financing of infrastructure,
education, and basic social services, as well as
a reduction in the tax burden on enterprises.
In this context, Romania has madeprivatization of viable enterprises a priority.
The main stumbling-block to more rapid and
decisive action on large loss-makers is
concern over the social implications of
unemployment, given the difficulties inWT/TPR/S/60 Trade Policy Review
Page xii
designing, financing and implementing
programmes of worker adjustment and social
safety nets.
25. A vital component of private sector
development is the more efficient provision of
business-related services, a sector stifledunder central planning.  The authorities have
given the priority to regulatory change,
privatization and appropriate competition
policies in services, so as to ensure that
essential services are provided as efficiently aspossible and that this efficiency is reflected in
lower prices.  To this end, Romania assumed
substantial market-opening commitments
under the GATS.  On financial services, in
particular, Romania has a policy of open non-discriminatory access for the establishment of
banks, subject to prudential regulations.  As of
2003, Romania's market for basic
telecommunication services will be open to
competition, and Romania has already opened
the market for digital cellular mobiletelephony.  Privatization of state-owned
service providers began in 1998, and
Romania's programme for 1999 includes
privatizing stakes in important state-owned
banks, transportation and utilities.  Decisiveaction on privatization in services, as well as
agriculture and industry, or the closure of
unsalvageable enterprises, will, combined with
an improved macroeconomic balance, help
Romania complete the transition to the marketeconomy.