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34 I Southeast Europe bne December 2017
Are investors about to take flight from Romania?
Clare Nuttall in Bucharest
As the EU’s fastest growing econo- my, Romania should be seeing a wave of new investment. Instead, foreign investors say they are putting new projects on hold due to the lack of policy predictability.
The latest to add his voice to the grow- ing tide of criticism was President Klaus Iohannis, who urged the government to drop its plans for fiscal reform and an overhaul of the judiciary in a strongly worded speech on November 2. The president, who has previously clashed with the centre-left government, warned officials not to “throw Romania into an economic adventure with a sad
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ending”, and cautioned that Bucharest risks losing investors if it continues
on the current course.
This had already been highlighted in a recent survey by the Foreign Inves- tors Council (FIC), which showed that confidence of foreign investors in the Romanian business environment
had slumped. Of the FIC members surveyed, 75% said that the business environment in Romania has worsened recently and that current developments have lowered their trust, and up to 90% of respondents said the constantly
changing legislation is affecting their business planning compared with
just 25% who said this in 2015.
Their views reflect a turbulent year in Romanian politics. The country is cur- rently on its third prime minister this year, with each change of government heralding an intense period of uncer- tainty. This was especially the case when Mihai Tudose came to power in June, making a series of policy announcements that were just as quickly changed or abandoned. Beyond that, the uneasy rela- tionship between the leader of the ruling Social Democratic Party (PSD) Liviu Dragnea on the one hand and Tudose and his predecessor Sorin Grindeanu on the other has led to further confusion.