Page last updated at 01:45 GMT, Saturday, 3 January 2009

Romanian fear amid economic gloom

By Oana Lungescu
BBC News, Mioveni, Romania

In the two years since it joined the European Union, Romania has been among the bloc's best-performing economies.

A stop sign at the Dacia factory
Work has stopped for a month at Mioveni's Dacia factory

In 2008, this country of 22 million people registered 8.3% growth, the highest rate in the EU, fuelled by foreign investment and credit from Western-owned banks.

But that was last year.

The huge Dacia factory in Mioveni, in south-western Romania, employs 14,000 workers to assemble the Logan, one of the world's cheapest cars and a symbol of the country's industrial rebirth after the collapse of communism.

Owned by the French car-maker Renault, it used to make a Logan a minute.

Now the parking lot is largely empty except for a few stray dogs, and the factory's white gate is firmly shut.

Dacia has stopped work for a month, until 11 January, the fourth stoppage in four months. Over 600 contracts will not be renewed, production and investment are being cut in what the management calls "anti-crisis measures".


On the main street in Mioveni, a small town of communist-style apartment blocks, there are few visible signs of the crisis.

As traditional Romanian music blares through loudspeakers, people are out shopping and the traffic is brisk.

There's a lot of fear, fear about tomorrow, uncertainty
Young father in Mioveni

Many drive Dacia Logans to show their loyalty. Almost half of Mioveni's 30,000 inhabitants work for Dacia and hope to keep their jobs.

"It's fine, we still get 85% of our wages despite the stoppage," one man said, sipping a beer at a pavement cafe despite the winter cold.

"I've worked at the factory for 38 years, my wife and children too, and we're happy here."

But not everybody is so relaxed.

"There's a lot of fear, fear about tomorrow, uncertainty," a man with a young baby said. "We don't know what to do and where to go. Few companies are still hiring and there's a lot of demand."

"Even those who went to work abroad may now be coming back because of the economic problems there. I don't know what's going to happen."

A couple, both Dacia employees, said they mainly stayed at home and kept their spending to the bare minimum.

"It's not only jobs at Dacia that are under pressure," company spokesman Silviu Sepciu said.

Over 120,000 people in Romania depend on the factory in some way or another. But Dacia is under even bigger pressure than other European car-makers.

Petru Dandea
Petru Dandea fears Romanians abroad could decide to return home

"New car sales dropped by as much as 50%," Mr Sepciu explained, "not just because the credit crisis has an impact on the mood of consumers, but also because of the massive import of second-hand cars."

"For every new car sold on the Romanian market, there are three second-hand vehicles."

Romania has suspended the registration tax for new cars to safeguard jobs at Dacia and trebled the tax for second-hand imports.

But the new centre-left government, sworn in just before Christmas, is yet to come up with a grand plan to ease the economic downturn.

'No money'

Building sites are closing down as property prices tumble. Foreign investors are getting jittery. Companies are laying off thousands.

At the Alpha trade union, the biggest in the country, Vice-President Petru Dandea worries about rising unemployment. His main concern is that some of the two million Romanians who went to work in Italy and Spain may decide to return in the spring.

"We know that at least 36,000 Romanians were unemployed in the construction sector in Spain," he said.

"They didn't come to Romania because the unemployment benefit in Spain is higher than in Romania. But if the situation doesn't reverse, when the unemployment benefit period is over, an important part of them will come back."

Economic misery has been kind to hip-hop artist Smiley

Millions of dollars sent home by migrants helped plug gaps in the state budget. Now the deficit is widening by the day.

"The data we have are pretty bad," Prime Minister Emil Boc recently admitted.

But one group of young musicians has turned the crisis into profit.

"I have no money", a hip-hop number sung in both Romanian and Spanish, is getting a lot of air-play these days.

The artist, who goes by the stage-name of Smiley, said he had written it a couple of years ago about people like himself, who have a lot of debt. But now, he laughed, "we are the only ones that make money in this crisis!"

Smiley also happens to be a student of economics. So does he think Romania, still one of the EU's poorest countries, is ready to face the music?

"No, we aren't ready for anything. Maybe we'll get through the crisis in a funnier way - Romanians always make fun of bad stuff to get over it much quicker. So this is my message: Keep smiling and maybe it will get better for you!"

Print Sponsor

Dacia workers end two week strike
11 Apr 08 |  Business
Country profile: Romania
11 Dec 08 |  Country profiles

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Sign in

BBC navigation

Copyright © 2020 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific