Flag of Romania

Romania country brief

Overview

Romania is a south-eastern European country located on the Black Sea. It has 2,508 km of land boundaries with Bulgaria to the south, Serbia to the southwest, Hungary to the west, Ukraine to its north, Moldova to the north-east, and 225 km of coastline on the Black Sea in the east. The capital of Romania is Bucharest.

Romania is a republic with a bicameral parliament. It claimed independence from the Ottoman Empire in May 1877 and became a Republic in December 1947. The country’s national day, known as Unification Day, occurs on 1 December and marks the 1918 union of Romania and Transylvania.

The population of Romania is 21.3 million (2012). Although 90 per cent of the population is ethnic Romanian, the country also has a sizable Hungarian minority (6.6 per cent) and smaller groups of Roma, Ukrainians, Germans, Russians and Turks.

Political overview

System of government

Romania has a presidential political system. Under this system, an executive president is elected directly for a maximum of two five-year terms and acts as the Head of State. While in office, the president must renounce all party positions and affiliations. The President is the Commander of the Armed Forces, represents the state in foreign relations and may take part in government meetings to discuss issues of national interest.

The legislature comprises two chambers: the Chamber of Deputies (332 seats) and the Senate (137 seats). The Constitution gives parliament a central place in the system of state authorities. It has power in exceptional circumstances to dismiss or suspend the president.

The president appoints the prime minister based on parliamentary elections. A mixed single constituency/party list voting system was used for the first time during the November 2008 elections. The system replaced the use of party lists, where citizens voted for a list of party-nominated candidates, rather than a single candidate. However, parties are still required to cross the threshold of 5 per cent of the total vote to obtain representation in parliament.

Political developments

Traian Băsescu has been President of Romania since 20 December 2004. He was sworn in for a second term on 16 December 2009. He has been twice suspended during his tenure, from 20 April to 23 May 2007 and from 6 July to 26 August 2012. On both occasions, a national referendum was held to determine whether he should be recalled, but failed to achieve enough votes.

The December 2012 Parliamentary elections were won by the ‘Social-Liberal Union’ (USL) with a two-thirds majority. The USL is comprised of the Centre-left and Centre-right Alliance. The Centre-left alliance consists of the Social Democratic Party (SDP) and the National Union for Progress in Romania (UNPR); the Centre-Right Alliance is made up of the Conservative Party (CP) and the National Liberal Party (NLP). On 17 December President Băsescu reappointed Victor-Viorel Ponta as Prime Minister. Mr Ponta had previously served as Prime Minister since April 2012.

Foreign policy

Romania’s foreign policy is predominantly focused on relations with its neighbours and within the EU, which it joined in 2007. Joining the EU’s visa-free Schengen arrangement is a particular priority, but Romania has so far been unsuccessful.  The country’s NATO membership (joined 2004) and relationship with the United States (including the December 2011 Agreement on hosting of a US ballistic missile defence system) are of strategic importance to Romania. Romania hosted the Bucharest NATO Summit in April 2008.

Romania has 1,077 troops in Afghanistan (as at August 2013), stationed at Regional Command Capital and Regional Command South. Romania also contributes to UN Peacekeeping Operations: in June 2013 it had 76 personnel on Mission to MINUSTAH (Haiti), MONUSCO (Democratic Republic of the Congo), UNMIK (Kosovo), UNMIL (Liberia), UNAMA (Afghanistan), UNMISS (South Sudan) and UNOCI (Cote d’Ivoire).

Economic overview

Romania suffered a large economic contraction in 2009 as a consequence of the global financial crisis; GDP growth dropped from 7.3 per cent in 2008 to -6.6 per cent in 2009. Romania agreed to raise taxes and implement budget cuts, including cutting public-sector wages by one-fourth, in return for an IMF/European Union/World Bank bailout totalling US$26 billion.

In 2011, real GDP growth increased to 2.2 per cent. That year, the Romanian government signed a two-year standby agreement with the IMF to safeguard against further instability. Two three-month extensions have since been granted, which expired on 30 June 2013. The government aims to negotiate a new, agreement with the IMF and the EU by the later part of 2013.  Romania expected to record no economic growth in 2012, with a budget deficit of around 2.5 per cent.

Romania's current foreign trade policy aims at the country's integration into Western markets. It hopes to adopt the Euro in 2015. However, with GDP per capita at US$12,800 (PPP) (est. 2012), Romania is the poorest member of the EU.

Romania's economy is largely based on services, which accounted for 59.5 per cent of GDP in 2011. Industry constituted the second-largest sector at around 33 per cent of GDP. Although agriculture accounted for only 7.5 per cent of GDP, some 31.6 per cent of Romania’s labour force works in this sector.

Romania’s principal export destinations in 2012 were Germany (18.6 per cent), Italy (11.8 per cent) and France (7.0 per cent); the main import sources were Germany (17.4 per cent), Italy (10.8 per cent) and Hungary (8.9 per cent).  Romania runs a current account deficit of US$-7.488 billion (2012 est.).

Romania’s unemployment rate is relatively low at 6.5 per cent (2012 est.).

Bilateral relationship

Diplomatic relations between Australia and Romania were established in 1968. Australia is represented by an Honorary Consulate in Bucharest and a non-resident Ambassador to Romania based in Athens. Romania has an Embassy in Canberra, a Consulate-General in Sydney and an Honorary Consulate in Melbourne.

Australia and Romania share a relationship based on community ties and growing engagement in international forums. According to the 2011 census, 14,050  people living in Australia declared they were Romanian-born, and 20,993 claimed Romanian ancestry.

Romania and Australia have concluded an Investment Promotion and Protection Agreement, a Trade and Economic Agreement and an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion. In April 2012, Australia’s Department of Infrastructure signed an inaugural air services MOU for code share with the aeronautical authorities of Romania. Romania is working with Australia as part of the UN Missions in Afghanistan (UNAMA) and Southern Sudan (UNMISS).

High level visits (positions indicated were held at the time of the visits)

Bilateral economic and trade relationship

Australia's two-way merchandise trade with Romania was A$94 million in 2012.  Exports to Romania amounted to A$26 million and consisted mainly of telecommunications equipment and parts and medicaments. Key imports from Romania were clothing; rubber tires, treads and tubes; medicaments; and sound and video recorders. Australia's trade in services with Romania is negligible.

Bilateral investment favours Romania with A$20 million invested in Romania in 2012, compared to A$1 million invested in Australia. A promising upturn in the trading relationship in the earlier part of the decade was cut short by the onset of the global financial crisis.

Updated August 2013