Category: The Future Starts Today

Serban Cioculescu: “This is probably the most volatile and most unpredictable area on the globe. The situation has been dangerous and unstable for a very long time, a situation that, since the cold war ended, has evolved along very unstable coordinates. On the one hand, as we all know, there is a very dangerous mix there of Islamic fundamentalism, authoritarian regimes, weapons of mass destruction, religious extremism and a large-scale demographic explosion. At the same time, because of its rich oil and natural gas reserves, the area is permanently in the focus of attention of the foreign powers and this thwarts working out solutions to suit both the local population and the local governments. Here we can think of the very well known Arab Spring phenomenon of 2011-2012, which breathed some fresh air and somehow laid the foundation for the democratization of the region and for eliminating totalitarian regimes, monarchies or despotic presidential regimes. On the other hand, however, it also brought to power mostly Islamist groups, even though some of them are moderate, therefore many wondered whether the Arab Spring was more of an Islamist Spring.”

One hot spot on the foreign agenda is Syria. Experts and PhD professors specializing in post-conflict management, members of the Syrian opposition coalition, representatives of Arab countries and of international organizations have this week been invited to attend a closed-door meeting, organized in Sussex, in the south of Great Britain, and focusing on Syria. The spokesperson for the Foreign Office, the one that organized the event said that they were doing their best to put an end to violence in Syria and to ensure a genuine political transaction

There are many voices claiming that president Bashar al Assad will soon leave, just like those calling on the international community to prepare the grounds for the aftermath of Bashar’s leaving. The al Assad regime’s crackdown on the popular uprising triggered a civil war in Syria, and the violent clashes between rebels and the regime loyalists continue. Over 60 thousand people, mostly civilians, have been killed since the start of the conflict in this country, in March 2011.

The announcement has been made recently by the office of the UN High Commissioner for Human Rights, and the figures were 25% higher than the ones released on a regular basis by the Syrian Observatory for Human Rights. The United Nations announced, on the other hand, that around one million Syrians are affected by a food shortage caused by governmental restrictions on the delivery of aid. The UN World Food Programme helps 1.5 million Syrians every month, but this figure is one million below the estimated number of Syrians that need aid.

The United Nations also estimated that during the almost two years since the conflict broke out, 550 thousand Syrians were forced to leave their country, with around 160 thousand of them finding shelter in Lebanon alone. Against the background of this humanitarian disaster, the hopes created by president Bashar al Assad’s promises to end the violence seem to have been shattered once again by the Damascus leader’s latest speech.

The Syrian president proposed a political plan according to which he remains in power, but this solution was turned down by the coalition in Opposition, which demands his stepping down as a prerequisite to any talks towards the resolution of the conflict. The international community was quick to respond. According to a spokesperson for the US State Department, Victoria Nallan, the speech given by Al Assad—whose initiative involves the establishment of a national charter to be subject to a referendum before the election of a new parliament and a new government—is a new attempt by the regime to cling on to power, and not an effort to take measures that would pave the way for political transition.

The British foreign secretary, William Hague, believes the Syrian leader is responsible for the violence in the country, and a similar message came from Berlin as well, where foreign minister Guido Westerwelle said Bashar al Assad’s speech revealed his lack of awareness as regards the current situation. The USA and EU have reiterated calls on Assad to step down, to allow a democratic transition in Syria, while the president of Egypt, Mohamed Morssi, said he supported the request of the Syrian people to send Al Assad to court for war crimes.

Statistics show that a quarter of the population of the European Union is retired. We are talking about around 120 million people, and their number is growing. There was a ratio of 4 to 1 between people of working age (15 to 64) and people over 65 in 2008. Under the circumstances, the European Union has started looking for solutions to sustain the pension system.





A report issued by the European Commission in 2010 estimated that the age expectancy of Europeans will be seven years higher by 2060, which would drastically increase the gap between the number of employees and that of pensioners. For this reason, the European Commission has recommended raising the retirement age, so that retirement may only be around one third of a person’s adult life, around 18 years.





In other words, retirement age is going to start pushing towards 70. This issue has sparked heated debates in the European Union, where the usual retirement age was around 60, and was even lower for women. Some countries have already taken measures to prolong working life. Germany has raised the retirement age from 65 to 67. In Romania, where the ratio of working people to retired people is 1.3 to 1, the retirement age has been set at 65 for men and 63 for women, a measure to be implemented gradually by 2030.



The European Union showed its concern with the issue by declaring 2012 European Year for Active Ageing and Solidarity between Generations. The initiative comes against the backdrop of great gaps between member states, as well as huge unbalances on the labour markets and the pension systems.



The European year of active ageing was launched early in March in Romania by the European Commission representative office in this country in partnership with the Ministry of Labour. In their view, active ageing means ageing well, with good integration into society, and part of that may be voluntarily returning to work. Polls reveal that one out of three Europeans would like to work past the retirement age, while in Romania this percentage is 27%. For them, the government has submitted to public debate an initiative announced by government adviser Andreea Paul Vass:





Andreea Paul Vass: “I propose that we create employment agencies for pensioners who wish to share their skills, knowledge, work and life experience with the younger generations. There are many people who would like to remain productive and use their spare time efficiently, but with flexible work hours and part-time employment.”





Active aging, the eradication of social exclusion and a balanced labour market are also the goals of the EUROPA 2020 Strategy aimed at reducing the gaps between EU members. Another objective is to boost the employment rate for the 20 to 64 age segment to 75% by 2020. But does such an objective hold real chances of success, given the current economic crisis? After Spain and Belgium, Italy has also reported 2 million unemployed citizens, 3% more as compared to the end of 2011. As reported by Elena Postelnicu, Radio Romania’s correspondent to Italy, 3 out of 10 Italian citizens aged under 24 are unemployed. Official data show that in November 2011, the unemployment rate in the Eurozone’s third largest economy was 8.8% and rising. Elena Postelnicu:





Elena Postelnicu: “Italy records the highest percentage of youth who are neither employed nor attending training courses in schools, universities or companies. The unemployment rate among people aged between 15 and 24 is 31.1%. There is low interest in education and employment in Italy. Young people graduate from vocational schools at the age of 23, and not 18, as is the case in Romania for example. Over 20% of Italy’s youth didn’t use a computer in 2011, and some 44% didn’t read a single book in the past year. What’s interesting is that 98,000 young Italians are willing to leave the country to find a job, but say they wouldn’t accept any kind of work and would have many requirements before signing a contract.”



The public debt crisis and austerity measures severely affect public sector jobs not only in Italy, but on the entire continent. There is no sign at the moment that unemployment will drop. The number of pensioners keeps growing, with statistics predicting that in 2060, some 28% of the European Union’s population will be aged 65 or over, as compared to the current 16%. The question remains: who will pay for pensions after 2030, when this problem is expected to become even more pressing?

The election of Vladimir Putin for a third term in the Kremlin came as no surprise for anybody. Putin was ahead in every opinion poll published before the presidential election at the beginning of March, eventually winning it in a landslide with nearly 65% of the votes.

The OSCE observers noted, however, a number of irregularities related to the vote count and said the election campaign was “clearly skewed” in favour of Putin, who has served as Russia’s prime minister for the last four years. The suspicion of fraud gave rise to massive protests in some of Russia’s biggest cities. Radio Romania’s correspondent to Russia, Alexander Beleavschi, has more:

“Most protesters come from the so-called middle class, especially in the big cities. They are, however, a minority compared to the number of people who continue to support the regime. Few protesters belong to a party or movement, while their political preferences are often eclectic and confused. They don’t have a clear leader or a clear ideology. Most protesters are financially independent and are active as far as information networks are concerned, including social networks and other modern networks, being therefore also socially active and able to identify the flaws of the political system built by Putin.

Paradoxically, those people are in fact the direct beneficiaries of the period of growth and stability, which Putin says is the great achievement of his term in office. At the same time, they have been excluded from the political and social life by the authoritarian regime, which ignored their demands for greater democracy, including fair elections, the freedom of the press, an independent justice system and the eradication of corruption and abuses, all of which benefit from the complicity of the regime and are defended by its law enforcement apparatus.”

As for Putin’s new term as president, political analysts wonder if this time he will be able to engage in a dialogue with this disgruntled part of Russian society. Citing his pragmatism and ability to adapt, pundits say Putin is capable of facing the new realities and implement the reforms requested by an increasing number of Russians. Some analysts however are not convinced that Putin will be able to improve, and even believe that he may not be able to pull through the entire duration of his six-year term.

As for Moscow’s foreign policy, Putin made statements a few days before the election that brought him his third term as president. In an article carried by Moskovskye Novosti, entitled ‘Russia and a changing world’, he underscored that foreign policy objectives had a strategic character related to the unique role that Moscow plays in the world. Among other things, the Russian leader would like a harmonious economic community, from Lisbon to Vladivostok. He said that “Russia is a part of this great world, economically, from an information point of view, and culturally. We cannot and would not isolate ourselves. We hope our opening will bring well-being to the citizens of Russia, and will consolidate trust, which is a dwindling resource nowadays”.

Putin said that Moscow would be consistent in its foreign policy, based on its own interests and purposes. He claimed that Moscow would continue to consolidate security, would reject confrontation, and would fight challenges such as nuclear proliferation, regional conflicts and crises, terrorism and drugs. NATO enlargement, the deployment of new elements of military infrastructure and the plan to set up an anti-ballistic missile shield in Europe are also things that Russia will continue to keep an eye on. NATO Secretary General Anders Fogh Rasmussen said he hoped there would be continuity in the alliance’s relationship with Moscow.

Speaking of the negotiations on his organization’s anti-ballistic missile shield, in the run up to the NATO summit due in Chicago in May, he said: “We hope we can make progress, especially in anti-ballistic missile defence. We believe that both NATO and Russia can take advantage of this cooperation”

What are the effects of the presidential election in Russia on Romanian- Russian relations over the upcoming years? Dan Dungaciu, head of the Institute for International Relations in the Romanian Academy, said that Romanian-Russian relations need to find a new basis:

“This resetting of the bilateral relationship also depends on resetting or re-evaluating Russia’s relations with the political or geopolitical entities that Romania is a part of. It isn’t very clear how the EU will relate to the Russian Federation, or how the most important player in the EU, Germany, will relate to it. It is also unclear how NATO will relate to the Russian Federation, or how the US will. Romania has special partnerships with all those entities, or is a member of those entities and so Romania cannot be alone in this bilateral relationship, and has never truly been alone”.

There is a question mark here, said Dungaciu, and Russia’s moves bear watching, but what also bears watching are the moves of the other big players on the world scene.

Following the discovery of a big natural gas pocket in the Romanian sector of the Black Sea, Romania’s energy self reliance no longer seems an unfulfilled dream. At least not for president Traian Basescu who has recently said that soon Romania will no longer depend on anyone for ensuring the energy amount necessary for domestic consumption. The prospect of Romania’s energy self reliance is reason for joy given that energy security is vital for any country.





Recently the American company ExxonMobil and the largest Romanian company in the energy field, Petrom, in which the main shareholder is the Austrian group OMV, have announced they discovered an important amount of natural gas in the Black Sea. The pocket is estimated at 42-84 billion cubic meters, 3 up to 6 times the country’s annual consumption. The gas deposit was discovered during the first deep-sea drilling operations in the Romanian territorial waters started at the end of 2011.



The Romanian head of state visited the American drilling ship: “It’s clear that Romania has the prospect of being totally energy self-reliant and if the other 4 or 5 deposits in the Neptun area, which are to be prospected, contain equal amounts of gas, Romania could become a source of gas not only for itself but also for many other countries in Europe”.





But when is the gas deposit going to be exploited? The president says exploitation could start between 2015-2017 after prospecting operations come to an end. Domestic gas consumption is covered by domestic gas exploited by Romgaz and Petrom companies as well as by gas imported from Russia. Romania also participates in the Nabucco gas pipeline project supported by the EU, which intends to reduce Europe’s dependence on Russian gas imports. Nabucco will transport natural gas from the Caspian Sea area via Turkey- Bulgaria-Romania- Hungary to Western Europe, detouring Russia. Furthermore, Romania also owns a substantial unconventional gas reserve, namely shale gas. It counts on its exploitation that could reduce by 10% natural gas imports.





The president of the National Agency for Mineral Resources, Alexandru Patruti, pointed out that Romania’s natural gas reserve, estimated to ensure domestic consumption for another 15 years, could be completed in the future with shale gas. The big foreign energy companies among which the American company Chevron, the Canadian company Sterling Resources and the Hungarian company MOL have already showed interest in exploiting shale gas. Chevron, a world leader in this type of extraction, has already leased 2500 sq kms in the Barlad area (in the east) and last week the Romanian authorities granted them the right to explore and exploit another 3 areas in the south eastern county of Constanta.





Initially the American company had announced its intention to start, in the second half of 2012, the exploitation of the deposit near Barlad, but upon pressure by civil society, ecologists and the opposition, they stepped back. The Chevron representatives pointed out that by the end of the year they would undertake in Barlad only exploration works using conventional technologies while in the county of Constanta they would make earth physics studies. Shale gas extraction is criticized by experts because it uses the hydraulic fracturing process, a method that pollutes groundwater and causes earthquakes. The method is banned in some European states such as France and Bulgaria.







The Social Liberal opposition in Romania called for the drafting of an impact study of unconventional gas exploitation, for public debates on the effect on the environment and the population and for the passing of special legislation in the field. The president of the National Agency for Mineral Resources, Alexandru Patruti, said Romania is now in the stage of prospecting shale gas, which could last up to 10 years. On the other hand, he explained that hydraulic fracturing is a standard method used in the oil industry for many years, even in Romania.





According to Patruti, the main impact on the environment would be a possible contamination of groundwater, which could be caused by the failure to observe the right procedures regarding drilling technologies and cementing of drills. If they are not properly made tight they allow leakage of the liquid used in the hydraulic fracturing process in the groundwater. He has given assurances that the impact of this process can be controlled and minimized by observing good practices in the field.







At present there are public discussions in other European states as well regarding the exploitation of unconventional gas. This type of gas is regarded even by EU leaders as a possible alternative to Europe’s energy security, which is why they believe the possibility should be considered. In January 2012 a working group was set up within the EC, which also includes representatives from Romania. The group analyses information related to the impact on the environment of shale gas exploitation.

50 heads of state and government from across the world recently met in the South Korean capital Seoul in an attempt to find means to encourage the use of nuclear energy for peaceful purposes and to restrict the terrorists’ access to this form of technology.

The talks focused on two issues: the safety of the nuclear power plants and their normal functioning in exceptional situations, and secondly, nuclear security and restricting access to radioactive and nuclear material.

But how does nuclear energy work when used for peaceful purposes? The reactors convert the energy produced by nuclear fission, the process of splitting the nucleus of an atom, into heat. The heat is used to produce steam, which runs turbines to generate electricity. The problems appear when the radioactive material in the reactor core is released into the environment, as was the case in Fukushima in 2011, and on a larger scale, in Chernobyl in 1986. Coal, gas and oil are also not safe, being the cause of tens of thousands of deaths every year. The Romanian expert Teodor Chirica, a member of the executive board of the European Atomic Forum in Brussels, says all forms of producing electricity imply certain risks:

“There is no form of technology, be it nuclear, conventional or renewable, that doesn’t have its risks. Nuclear energy also implies risks, but what’s important is how you control these risks. The use of nuclear energy reduces reliability on the hydrocarbons produced in areas that are either under strong political control or politically unstable. As for environmental protection, nuclear power doesn’t cause carbon dioxide emissions, so it doesn’t contribute to the greenhouse effect. With regard to economic efficiency, this form of energy is the second most efficient after hydropower.”

We asked Teodor Chirica whether the public should worry about radioactive waste:

“We have the necessary technology to store this type of waste in the safest possible conditions. Moreover, the amount of such waste is lower compared to the waste caused by conventional industries. One such example is the waste coal and ash produced by thermal power plants using inferior fuels.”

Borbala Vaida, the head of the National Commission for Nuclear Activities Control, explains that everything is also under control when it comes to nuclear security:

“To prevent the proliferation of nuclear weapons, we wanted that all research reactors and the reactors producing radioisotopes for medicine and industry to use low-enriched uranium which cannot be used to make nuclear weapons. These highly enriched materials must be repatriated to their countries of origin. In the case of Romania, the country of origin is the Russian Federation. There, they can provide maxim security conditions for these materials and, in keeping with international conventions and treaties, they will not allow for this material to be used for destructive purposes, only for civilian use. In Romania we only have low-enriched uranium at the research reactor in Magurele.

We are in line with the European Union policy and guidelines and have carried out all so-called stress tests, which have proved that Romanian reactors are robust and can withstand extreme situations. To improve their security and safety even more, measures have been taken to make reactors cope even better with disasters such as we had in Fukushima. I’m referring in particular to the control of the hydrogen in the reactor.”

The safety of nuclear power stations is constantly improving. Borbala Vaida tells us that nuclear energy is indeed risky, but that nuclear industry is subject to highest regulation and control of all industries:

“There are many bodies working together to prevent accidents. It’s true that a nuclear accident may have disastrous cross-border consequences but this is precisely why there is international cooperation to minimise risks in this sector. There are many states that have not yet managed to convert their research reactors and haven’t signed the treaties and conventions in the field. These treaties contain obligations, which, once accepted, make these aterials secure everywhere in the world and contribute to global peace.”

Romania opened its first nuclear reactor of Soviet production in 1957 as part of the Institute for Atomic Physics in Magurele, in the southeast. In 2002, the reactor was closed down permanently. At the moment, Romania has two working nuclear reactors at the Nuclear Power Station in Cernavoda, in the southeast, which provides about 18% of the country’s energy demand. The plant’s first reactor became operational in 1996, followed by another one in 2007. There are plans to build two more reactors by 2019.

At the end of last year, famous economist Nouriel Roubini made somber predictions regarding the global economy. This crisis, in spite of the fiscal austerity, will spark an economic disaster.





Roubini said he didn’t foresee a third world war, but that social and political instability in Europe and the other developed economies would turn severe. In the 1930’s, the economist pointed out, the world was financially unstable. Devalued currencies led to money getting printed in excess, there were trade wars, and many countries, such as Germany, Italy, Spain and Japan had populist, radical and aggressive governments.





The same mistakes of the Great Depression of 80 yeas ago should not be repeated. That was a time when financial stimulus was used way too soon, and this is a great risk right now. Roubini, whose opinions carry a lot of weight since some of his predictions were confirmed, also pointed to China, anticipating a crash landing in about two years, if Beijing holds on to its model of economic growth. China’s economic stimulus program, based on consumption rather than on investment, has supported constant growth, but has also fed inflation, increasing debt at the same time.





A Wall Street Journal review shows that social unrest is four times higher than a decade ago. Now, Roubini warns again — 30% of Chinese loans will go bad, and this will shake the very foundations of that country’s banking system. In order to sustain economic activity, China’s central bank brought down twice in the last four months the obligatory minimum bank reserves, which allowed commercial banks to borrow more.





It is hard to know if China’s economy, which has been overheating over the last few years, will have a smooth landing, somewhat dimming its spectacular growth, or towards a collapse, if it found itself incapable to sustain the pace of this growth, as Pacific Investment Management also said. That corporation, which runs one of the largest hedge fund, expects advanced economies to stagnate.





Statistics show that Turkey is the country with the highest economic growth in Europe and the second highest in the world after China’s. The Turkish economy in 2011 went up 8.5%, and for this year the Ankara government estimated a growth of 4%. The target for next year is 5 percent. In the EU, the treaty for fiscal stability with its associated fund are instruments meant to secure the economic future. In order for them to work, however, national reforms are needed.





Problem states like Italy and Spain have already made firm commitments and are trying to apply the strategy suggested by Brussels: curbing tax evasion, efficient tax collection, streamlining spending. Madrid is faced with record high unemployment and with a dramatic drop in consumption. Italy, with a growing public debt, which now stands at 120%, last year had modest growth. The Mario Monti government applied a number of essential reforms and declared war to tax evasion. The Italian premier said that, failing that, Italy would have ended up like Greece.





Beyond all technicalities, if several European economies slump back into recession, this might translate as a new shockwave for investors. In the case of Bucharest, experts’ concerns have been confirmed. After two quarters of consecutive economic decline, starting April 1st Romania has fallen back into recession.





It is not the only country to experience difficulties, as the domino effect has started to be felt throughout the world. In March, Romania’s annual inflation rate has dropped to 2.4%, a historical low in the past 23 years. The vice-president of the Association of Financial and Banking Analysts in Romania, Ionut Dumitru, believes the current fluctuation of the inflation rate is normal, while the inflation will continue to grow as the end of the year draws near:





Ionut Dumitru: “We can say the inflation rate for March was in line with market expectations, and thus it produced little surprise. Owing to the base effect, the annual inflation rate has reached historic lows. In the same period of last year we reported high monthly inflation rates, while this year the rates have gone down, thus lowering the annual average. Over the next months we will probably see a negative base effect. Consequently, starting with May the inflation rate will probably go up to 3-odd percent, although it will not exceed 4%, the upper limit set by the National Bank of Romania for 2012”.



The average inflation rate over the past 12 months stood at 3.8% in Italy, 3.1% in Belgium, 2.3% in Germany and 1.8% in Spain.