US embassy cable - 05BUCHAREST872

UNCLAS SECTION 01 OF 03 BUCHAREST 000872 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR EUR/NCE - WILLIAM SILKWORTH 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, ECON, SOCI, RO 
SUBJECT:  ROMANIA SET TO SIGN EU ACCESSION TREATY 
 
REF: A) 04 BUCHAREST 3496; B) 04 BUCHAREST 2306; C) 04 
 
BUCHAREST 690 
 
1. (SBU) Summary: Romania will sign its EU accession treaty 
April 25.  Full EU membership is slated for 2007, barring 
significant backsliding in key areas such as judicial reform 
and the fight against corruption.  While EU accession 
remains at the top of Romania's foreign policy agenda and 
enjoys widespread public support, implementing needed 
reforms, especially in Justice and Home Affairs, competition 
and agriculture, will prove a significant challenge for the 
new government.  Most EU contacts opine, however, that 
Romania's 2007 accession remains a "done deal," despite 
lingering questions about the country's preparedness. End 
Summary. 
 
EU Membership Tops the Agenda 
----------------------------- 
2.  (SBU) Romania is poised to sign its landmark EU 
accession treaty April 25 at a ceremony in Luxembourg, 
following the European Parliament's expected stamp of 
approval April 13.  With negotiation chapters closed, the 
treaty sets the stage for full Romanian EU membership, along 
with neighboring Bulgaria, in 2007.  Romania's center-right 
National Liberal Party (PNL)-Democratic Party Government 
(PD), led by President Traian Basescu and PM Calin Popescu- 
Tariceanu, remains staunchly committed to securing Romania's 
2007 European Union (EU) accession, viewing it as the 
country's single most pressing foreign policy objective.  In 
fact, Romania's 2007 accession enjoys widespread support 
across the political spectrum and, after Romania's 2004 NATO 
membership, is viewed by many within the GOR as the final 
step in solidifying Romania's western orientation after 
decades of communist rule. 
 
3.  (SBU) The Romanian public voices similar optimism--a 
Eurobarometer survey released February 14, 2005 indicated 
that Romanians hold the highest degree of trust in the EU 
(74%), followed by Lithuanians (68%) and Hungarians (64%) of 
all thirty countries surveyed.  Additionally, between 50% 
and 70% of Romanian respondents expect the EU to play an 
active and positive role in solving issues such as 
terrorism, foreign affairs, the economy, crime, 
environmental protection, healthcare and education. 
 
4.  (SBU) Despite these positive marks, the survey also 
revealed that over 42 percent of those polled have little 
knowledge of EU institutions, while only 11 percent of 
respondents indicate they are well-versed on EU affairs. 
The general public's dismal level of EU knowledge contrasts 
sharply with the government's official discourse in Brussels 
and EU capitals, where Romanian officials are regularly seen 
making the rounds and courting favor from their EU 
counterparts.  PM Tariceanu openly acknowledges that the GOR 
must step up its public information efforts, especially as 
Romania moves to implement tough political and economic 
measures required by accession. 
 
5. (SBU) However, skeptics note that with Romania's 
predominantly rural population, getting the word out on the 
EU will be an uphill battle.  Many of our contacts tell us 
that ordinary Romanians only perceive the "up side" of EU 
accession and either do not understand - or do not want to 
candidly acknowledge - that EU accession requires meaningful 
political and economic reforms.  In a society in which 35 
percent of the population still relies on subsistence 
agriculture using archaic techniques, analysts predict the 
agricultural sector will be especially hard hit by EU- 
mandated reforms.  Equally important, Romanian's SMEs and 
unrestructured, overstaffed companies will be confronted 
with tough competition on the EU single market, forcing them 
to become more efficient and competitive, possibly costing 
jobs, or to succumb under EU pressure. 
 
2007 EU Accession: A Rocky Road Ahead? 
-------------------------------------- 
6.  (SBU) Although Romania's EU accession--tied to 
neighboring Bulgaria's--remains largely on track for now, it 
will face significant EU scrutiny in the run up to 2007 (Ref 
A).  EU concern about lagging Romanian progress in meeting 
accession requirements, especially Justice and Home Affairs, 
Competition, Environment, and Agriculture prompted the 
December 2004 addition of a "safeguard clause," that could 
delay Romania's accession for up to one year, should the 
European Commission's opinion of Romanian progress take a 
steep downturn to conclude that Romania is unable to meet 
its membership obligations.  A decision to delay would 
require a qualified majority vote by the European Council, 
based on a recommendation by the European Commission.  While 
less severe, two other potentially penalizing clauses, the 
"Internal Market safeguard clause" and the "Justice and Home 
Affairs safeguard clause" allow the Commission to force 
Romania into compliance with EU requirements up to three 
years after the accession treaty enters into force. 
 
7.  (SBU) During a meeting with PolChief, the local EC 
representative office's DCM affirmed that the EU will keep a 
close eye on Romania's progress in meeting accession 
requirements through a series of monitoring reports.  The 
first monitoring report, due in May, "will serve as the 
bellwether for any potential accession delay," according to 
Simmons.  The report will assess Romania's progress in 
enhancing the administrative capacity of the Competition 
Council, enforcing legislation on state aid and anti-trust, 
and ensuring effective controls of any future state aid.  On 
difficult Justice and Home Affairs issues, EU monitoring 
requires development of a strategy and action plan for 
reforming Romania's overburdened and tainted judicial 
system, a subject which will also be tackled in the report. 
 
8.  (SBU) With corruption at the top of EU concerns, the 
monitoring report will assess Romania's progress in 
enforcing anti-corruption legislation and the effectiveness 
of the country's National Anticorruption Strategy---which 
has recently come under heavy fire from domestic non- 
governmental organizations and international observers alike 
for its scant progress in catching and prosecuting the "big 
fish."  Additionally, the Schengen Action Plan for visas 
must be fully implemented, along with effective measures to 
clamp down on human trafficking, and increase border 
controls, a key issue once Romania and Bulgaria become the 
EU's eastern border in 2007.  The EU also requires passage 
of legislation by the end of March to reform the police and 
gendarmerie, two entities often plagued by corruption and 
lack of professionalism. 
 
Accession Delay as a "Last Resort" 
---------------------------------- 
9.  (SBU) Despite the challenges remaining, EU Commissioner 
for Enlargement Olli Rehn stated during his February 28 
visit to Bucharest that a one-year delay would be a "last 
resort," diluting the "safeguard clause" threat in the eyes 
of many political observers here in Bucharest.  He also 
remarked following his meeting with FM Ungureanu that "there 
is an encouraging beginning, proving that the new government 
takes this issue very seriously and has planned certain 
strategies, but they must turn into real results."   Our EU 
contacts echo these sentiments, with one UK embassy official 
remarking during a meeting with PolOff, that despite 
remaining GOR accession challenges, the Accession Treaty is 
"basically a done deal," despite lagging GOR implementation. 
 
Focus on Implementation 
----------------------- 
10.  (SBU) Our EU interlocutors confide that Basescu's 
efforts to come out swinging on tough issues such as 
corruption, judicial reform, and economic reform during his 
first few weeks in office worked to paint a more positive 
image of Romania in the eyes of many EU member states and 
the European Parliament--a body which has previously taken a 
particularly dark view of Romanian accession progress. 
Evidencing Basescu's drive, our government contacts 
highlight that a package of laws strengthening existing 
legislation on graft, tax evasion and related crimes will be 
presented to parliament by March 31.  Since Basescu's 
swearing-in and his designation of the anti-corruption 
battle as a "national security priority," the GOR has 
launched investigations into high profile corruption cases 
and lifted immunity for former ministers, a significant 
break from the previous Social Democratic Party (PSD)-led 
government which frequently appeared to be dragging its feet 
in the fight against corruption.  EU contacts and non- 
governmental organizations alike voice optimism about the 
new government's energetic first steps in the anti- 
corruption fight. 
 
11.  (SBU) Additionally, Romania has taken concrete steps to 
show the EU that it is putting its previously rocky 
financial house in order.  The State Asset Resolution Agency 
(AVAS) seized the bank accounts of 1392 companies whose 
arrears to the healthcare budget total $136 million end- 
2004, in an effort to improve budget collection and curb 
state aid to state-owned and party-affiliated companies. 
The Competition Council also has strengthened its grip on 
state aid and antitrust legislation, ruling on the 
termination of state aid for 173 companies in disadvantaged 
zones, and fining three companies, one of them a major EU 
hotel chain, for breach of antitrust legislation. 
 
12.  (SBU) Despite these positive steps, most observers 
caution that the GOR's implementation track record is weak, 
at best.  The EU also is wary of the possibility of snap 
elections this fall in an effort by Basescu and his team, 
which now hold a slim majority in the Parliament, to gain 
more secure footing and capitalize on current PNL-PD 
approval ratings, hovering at 56 percent, before forging 
ahead with tough EU reforms. Our EU contacts in Bucharest 
express concern that instability created by new elections 
could effectively block progress in implementing EU 
criteria.  Despite cautionary notes from the EU, public 
remarks by Basescu indicate that he is pushing for early 
elections between the accession treaty signing in April and 
September to provide his centrist government with a stronger 
mandate to fight corruption and bring Romania into the EU in 
2007.  However, many within Basescu's governing alliance 
view snap elections unfavorably following many of their 
tough electoral campaigns last fall, with even PM Tariceanu 
stating that he wants elections no earlier than January 
2007, banking on Romania's January 1, 2007 EU accession. 
 
13.  (SBU) Although a more distant possibility, another 
pitfall lies in the possibility of "enlargement fatigue" 
setting in before member states ratify Romania's accession 
(Note: The treaty is set to be ratified by parliament in all 
25 current EU member states.  In the unlikely case that an 
EU country fails to ratify the treaty, it would become null 
and void.  End note.)  Should the integration of the EU's 
newest members prove more difficult than expected, one 
Embassy EU contact noted that a negative swing in political 
and public opinion "could throw a wrench" in Romania's 
accession timeline.  On the up-side, many observers note 
that new trade and investment opportunities offered by EU 
Romania and Bulgaria should offset the cost of bringing the 
EU's prospective new members into the union. 
 
14. (SBU) On the Romanian domestic side, our contacts in the 
European Commission's Bucharest office note that Romanian 
public opinion ratings favoring the EU will likely dip over 
the next one to two years as implementation of EU 
regulations, such as deregulating the energy market, begin 
to affect consumer's pockets, making the tough reforms 
needed even more difficult for Romania's politicians to 
implement.  The Basescu government and press have begun to 
warn the public that accession strains will be significant, 
particularly as non competitive firms and many agricultural 
units unable to meet higher standards are forced to exit the 
market. 
 
15.  (SBU) Comment: Both political commentators and our EU 
contacts in Bucharest widely assert that the decision to 
grant Romania entrance into the EU was largely "political," 
despite Romania's lagging status behind current EU member 
states.  EU political leaders want to bring Romania into the 
"European" fold sooner rather than later, even if Romania 
has not strictly adhered to EU accession requirements. 
Although unlikely, a one year delay would have a limited 
impact on Romania's ultimate EU membership, but rather, 
would be a significant political embarrassment for the PNL- 
PD alliance government, and a blow for many Romanians who 
view EU accession, together with NATO membership, as the 
ultimate proof that Romania has fully joined the West.  Not 
surprisingly, internal and external pressure will weigh 
heavily on Basescu and his team to fully implement needed 
reforms to keep Romania on track for 2007.  End Comment. 
 
16. (U) AmEmbassy Bucharest's reporting telegrams, as well 
as daily press summaries, are available on the Bucharest 
SIPRNet website: www.state.sgov.gov/p/eur/bucharest 
 
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