Bloomberg News

Romania Political Bickering May Delay IMF-Agreed Stake Sales

June 22, 2012

Romania will probably fail to meet some deadlines for selling stakes in state-owned companies as political wrangling between nation’s two top political leaders impedes progress, Prime Minister Victor Ponta said.

The Balkan nation, which pledged to the International Monetary Fund to sell a 15 percent stake in its natural-gas grid operator Transgaz SA (TGN) by the end of June, will probably delay the sale “by a short time period,” Ponta said during a meeting with foreign reporters in Bucharest today.

“I want to express my personal bitterness that when we meet for a government meeting, we allocate 75 percent of our time discussing about how to protect ourselves from political attacks,” he said. “We progressed very much with preparing the Transgaz share sale, but we probably won’t be able to do it by the end of June.”

Romania, which has changed governments three times this year, is facing increased political turmoil ahead of general elections after Ponta was accused of plagiarism over his doctoral thesis. He blamed President Traian Basescu for instigating the accusations. The two are also arguing over who should represent Romania at the next meeting of European Union leaders.

General elections may be held around Nov. 1 or on Dec. 2, depending on a political agreement between Ponta’s coalition of Social Democrats and the Liberals and the Democrat-Liberals, once headed by Basescu and who are now in the opposition.

‘Strong’ Conflict

Ponta, 39, said he would prefer general elections take place sooner rather than later for Parliament to have enough time to debate and approve a budget for next year.

“There’s a strong political conflict between me and the president because we come from different parties,” Ponta said. “There’s also a personal one because all weapons are on the table for the battle.”

The president’s office has no “official position for the moment” on Ponta’s statements, spokesman Bogdan Oprea said by phone.

The government seeks to delay sales of minority stakes on the stock exchange until the end of 2013, Mediafax reported, citing an Economy Ministry document.

The sale of a majority stake in chemical company Oltchim SA (OLT) remains one of the government’s “top priorities,” Ponta said, adding that his Cabinet plans to go ahead with the sale, which is scheduled to happen by the end of September.

The government secured a 5 billion-euro ($6.27 billion) precautionary accord from the IMF and the EU last year to shield it from the European sovereign-debt crisis and prevent fiscal slippage ahead of elections.

State Stakes

It pledged to sell 15 percent stakes in Transgaz, natural- gas company Romgaz SA, and 10 percent stakes in hydro-power generator Hidroelectrica SA and nuclear-power operator Nuclearelectrica SA.

“I am very discontent the president is keeping me occupied with political scandals, which reduces enormously the time allocated for governing the country,” he said.

Ponta denied again today plagiarism allegations published on June 18 in Nature magazine and Germany’s Frankfurter Allgemeine Zeitung over his doctoral thesis and said he won’t resign. He said he asked a special ethics commission to investigate the accusations and formulate a response.

Documents provided by an unidentified source to Nature showed that more than half of Ponta’s 432-page dissertation on the International Criminal Court for the doctorate he received in 2003 from the University of Bucharest was copied without proper reference notes.

Ponta’s political ally and head of the Liberal Party Crin Antonescu said his party plans to start the procedures to impeach the president if he fails to agree on appointing Puiu Hasotti as the culture minister, Mediafax reported today.

Ponta reiterated the government will put shale-gas exploration and gold-mining projects on hold until after a general election this year.

The government will attempt to assess environmental conditions and would look over Chevron Corp. (CVX:US)’s plan to explore for shale gas in the country if it wins elections, said Ponta.

A gold-mining project in the town of Rosia Montana, majority owned by Gabriel Resources Ltd. (GBU) is another source of conflict with the President, Ponta said.

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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