Situated in Eastern Europe, north of the Balkan Peninsula, Romania has a total area of 238,391 sq km (92,043 sq mi). Comparatively, Romania is slightly smaller than Oregon. The dimensions of the country are 789 km (490 mi) E–W and 475 km (295 mi) N–S. It is bounded on the N and NE by Ukraine and Moldova, on the E by the Black Sea, on the S by Bulgaria, on the SW by Serbia, and on the W by Hungary, with a total boundary length of 3,069 km (1,907 mi), of which 225 km (140 mi) is coastline. Romania's capital city, Bucharest, is located in the south-central part of the country.

The backbone of Romania is formed by the Carpathian Mountains, which swing southeastward and then westward through the country. The southern limb of this arc-shaped system is known as the Transylvanian Alps, whose compact, rugged peaks rise to 2,543 m (8,343 ft) in Mt. Moldoveanu, Romania's highest elevation. The eastern Carpathians have an average elevation of 1,000 m (3,300 ft) and exceed 1,900 m (6,200 ft) only in the highest ranges.

On the eastern and southern fringes of the Carpathian arc are the low plateaus and plains of Walachia, extending to the Prut River (Moldovan border) in the east and to the Danube (Bulgarian border) in the south. On the inside of the Carpathian arc is the Transylvanian Basin, a hilly region dissected by the wide, deep valleys of the Mures and Somes Rivers.

The Dobruja, located between the lower Danube and the Black Sea, is an eroded plateau with average elevations of 400 to 600 m (1,310–1,970 ft). Except for the low-lying, swampy Danube delta in the north, the Black Sea coast of the Dobruja is steep, facing the sea with almost vertical cliffs.

Romania is susceptible to severe earthquakes. An earthquake that struck the country on 4 March 1977 destroyed or severely damaged some 33,000 buildings and left more than 35,000 families homeless. The shock, measuring 7.2 on the open-ended Richter scale, was the most severe in Europe since a series of shocks in October–November 1940, also in Romania.

Romania's climate is of the moderate, humid continental type, exposed to predominant northerly cold winds in the winter and moderate westerly winds from the Atlantic in the summer. Average January temperatures range from —4°C to 0°C (25°F–32°F). During the summer, the highest temperatures are recorded in the Danube River valley (24°C/75°F). Temperatures decrease toward the high elevations in the northwest and toward the southeast, where the Black Sea exerts a moderating influence. Precipitation decreases from west to east and from the mountains to the plains, with an annual average of between 100 and 125 cm (about 40 and 50 in) in the mountains and about 38 cm (15 in) in the delta.

The World Resources Institute estimated that there were 508 vascular plant species in Romania. In addition, Romania was home to 95 mammal, 376 bird, 24 reptile, and 19 amphibian species. This calculation reflects the total number of distinct species residing in the country, not the number of endemic species.

According to a 2015 report issued by the International Union for Conservation of Nature (IUCN), the number of threatened species included 7 types of mammals, 18 species of birds, 2 types of reptiles, 22 species of fish, 11 species of mollusks, 27 species of invertebrates, and 5 species of plants. Threatened species included the horned grebe, Mediterranean monk seal, gray triggerfish, and saker falcon.

Natural vegetation consists mainly of steppe-like grasslands in the Moldavian and Walachian lowlands, with tall, deep-rooted grasses in the more humid sections and short, shallow-rooted grass in the drier parts. The Carpathian system is covered with forests, with deciduous trees at lower elevations and conifers at altitudes above 1,070–1,220 m (3,500–4,000 ft). Alpine meadows occupy the highest parts of the mountains.

Wild animals, including black chamois, Carpathian deer, wolves, hares, marten, brown bears, lynx, boars, and foxes, have sought refuge in the sparsely inhabited and forested Carpathians. Water birds flourish in the Danube delta, and sturgeon abound Page 620  |  Top of Articlein the waters of the lower Danube. Carp, bream, and pike populate the lakes; dace, barbel, and trout are found in rivers and streams.

LOCATION: 46°N; 25°E. LAND BOUNDARIES: Total: 2,844 kilometers (1,767 miles); Bulgaria, 605 kilometers (376 miles); Serbia, 531 kilometers (330 miles); Hungary, 424 kilometers (264 miles); Ukraine, 601 kilometers (373 miles); Moldova, 683 kilometers (424 miles); Coastline, 225 kilometers (140 miles). TERRITORIAL SEA LIMIT: 12 nautical miles.

Rapid industrialization since World War II has caused widespread water and air pollution, particularly in Prahova County, an oil-refining region.

Air pollution is heaviest in the nation's cities, where industry produces hazardous levels of sulfur dioxide. In 1992, Romania had the world's 28th-highest level of industrial carbon dioxide emissions, which totaled 123.2 million tons, a per capita level of 5.4 tons. However, by 2009, Romania ranked 43rd in the world as the total of carbon dioxide emissions had dropped to 79.3 million tons, a per capita level of 3.9 tons. In 2012, the World Resources Institute reported that the carbon emissions had grown to 82.5 million tons.

Damage to the nation's soils from erosion and pollution has decreased agricultural production by about half in some areas. Acid rain originating in Hungary is another environmental problem. Some water conservation programs were initiated in the mid-1980s, but the Environmental Protection Law of 1972 has not been strictly enforced.

Romania's forests and natural steppes have been encroached on by farmers. Two floods, two earthquakes, and radioactivity from the Chernobyl nuclear site have also contributed to the nation's environmental problems. Moreover, intensive exploitation of forests before, during, and immediately after World War Page 621  |  Top of ArticleII necessitated a reforestation program that, between 1950 and 1964, resulted in the replanting of 1,159,600 ha (2,865,400 ac).

The World Database on Protected Areas (WDPA) reported that Romania had designated a total of 1,334 protected areas, including 56,503 sq km (21,816 sq mi), or 24% of its land, and 2,502 sq km (966 sq mi), or 43% of its marine area, as of 2014. There are 13 national parks in Romania. Romania also has 19 Ramsar Wetland Sites of international importance.

According to the United Nations (UN), in 2014, water resources totaled 212.0 cu km (50.9 cu mi). The CIA reported that water usage was 6.9 cu km (1.7 cu mi) per year for 2009. Domestic water usage accounted for 22.0% of total usage, industrial for 61.0%, and agricultural for 17.0%. The CIA reported that in 2009 per capita freshwater withdrawal from available sources totaled 320.8 cu m (11,328.9 cu ft) per year. According to the UN, in 2015, 100% of rural residents and 100% of urban residents had access to safe drinking water.

In 2005, a revised environmental protection law brought environmental policy in Romania in line with European Union (EU) standards. Since Romania's accession to the EU in 2007, €5.6 billion from European funds had been allocated to environmental projects through 2013. Among the notable developments since 2007 have been a nationwide urban-waste-management program and a program to support the development and use of renewable energy sources.

The US Central Intelligence Agency (CIA) estimated the population of Romania in July 2015 to be approximately 21,666,350, which placed it at number 58 in population among the 238 countries, dependencies, and territories of the world. In 2015, approximately 15.7% of the population was over 65 years of age, with another 14.5% under 15 years of age. The median age in Romania was 40.2 years. There was slightly less than one male for every female in the country. The population growth rate was -0.3%. The projected population for the year 2025 was 18,229,000. Population density in Romania was calculated at 87 people per sq km (225.4 people per sq mi) in 2014.

The CIA estimated that 54.6% of the population lived in urban areas in 2015 and that urban populations had a population growth rate of less than 0.1% between 2010 and 2015. The largest urban area was Bucharest, with a population of 1.9 million in 2015.

Estimates of Romania's net migration rate, carried out by the CIA in 2015, amounted to -0.2 migrants per 1,000 citizens. The UN Population Division estimated that in 2013, the total number of emigrants living abroad was 3.3 million, and the total number of immigrants living in Romania was 199,000. Population shifts numbering in the millions occurred as a result of World War I and World War II—because of territorial changes, deportation and extermination of Jews by the Nazis, flight before the Soviet military forces, deportations to the USSR, expulsion of the Volksdeutsche (ethnic Germans), and departures following the Communist takeover and before stringent security measures halted the flow. About 117,950 Jews immigrated to Israel between 1948 and 1951; another 90,000 were permitted to emigrate during 1958–64. Some 120,000 ethnic Germans left Romania between 1978 and 1988, and some 40,000 ethnic Hungarians fled in 1987 alone. Some 44,160 Romanians emigrated in 1991 and 31,152 in 1992. In 1992, 103,787 Romanians were given asylum in Germany, but, in September of that year, Germany returned 43,000 refugees, over half of whom were Roma (Gypsy). According to Migration News, in 2005, the Romanian government discouraged illegal migration by preventing up to 4 million Romanians from leaving to travel to EU countries on the grounds that they had insufficient funds or could not prove that they were merely visiting abroad. In addition, returning Romanians who overstay 90 days abroad have their passports confiscated.

During the Kosovo crisis in 1999, Romania offered to accept 6,000 Kosovar refugees from Macedonia under the UN High Commissioner for Refugees (UNHCR)/International Organization for Migration (IOM) Humanitarian Evacuation Programme. However, Romania did not host nearly that many, and almost all the refugees ultimately returned to Kosovo.

From 1991 to 2003, some 10,000 Romanians per year were permanent emigrants. In 2015, the CIA estimated Romania's net migration rate at -0.2 migrant(s) per 1,000 people.

The CIA reported in 2011 that Romanians constituted about 83.4% of the total population. Hungarians made up the largest minority group with about 6.1% of the total population. Roma accounted for about 3.1% of the population according to census figures; however, international groups estimated that the actual number of Roma may include up to 10.0% of the population. According to CIA statistics, lesser minority groups in 2011 included Ukrainians (0.3%) and Germans (0.2%). Other minorities include Turks, Serbs, Croats, Jews, Poles, Bulgarians, Czechs, Greeks, Armenians, Tatars, and Slovaks. As of 2010, government statistics indicated that at least 530,000 people identified themselves as Roma (members of a widely dispersed European ethnic group with significant presence in Romania and Bulgaria). Nongovernment sources placed the number of Roma in Romania higher, at more than 2 million. The Roma are severely disadvantaged, with most living together in rural villages in extreme poverty. Literacy rates are low, as a majority do not attend or never complete primary schooling. Life expectancy among this group is lower than the national average. The government has often been criticized for a failure to provide adequate educational and health programs for the Roma and for the lack of programs to integrate them into Romanian society. Since Romania joined the EU in 2007, the Roma have become EU citizens and thus can move freely within the countries of the EU. As a result, many have moved in search of better opportunities in countries such as France, Spain, Italy, and the United Kingdom, but such migration has also caused trouble in these new countries. In August 2010, France began deporting Roma people, repatriating them mostly to Romania and Bulgaria. Those who were sent back to Romania returned to the same poverty that they had originally experienced.

Hungarians, Czechs, Slovaks, Roma, and other minorities were represented in both chambers of the parliament elected in 2008, although Roma representatives had fewer seats in relation to their proportion of the population.

Romanian is the official language. According to the CIA, as of 2011, 85.4% of the population spoke Romanian, 6.3% spoke Hungarian, and 1.2% spoke Romany. As Romanian is a Romance language derived from the Latin spoken in the Eastern Roman Empire, Latin word elements make up 85%–90% of the modern Romanian vocabulary. In the 2,000 years of its development, the language was also influenced by contacts with Slavonic, Albanian, Hungarian, Greek, and Turkish. Of the loanwords, Slavonic elements are the most numerous. Earliest Romanian written texts still extant date from the 16th century. In addition to letters of the English alphabet, Romanian has the letters ţ, î, â, ă, and ş. Hungarian and German are spoken by a large percentage of the inhabitants of Transylvania.

According to the 2011 census, about 86% of the population were members of the Orthodox Church, one of the autocephalous Eastern Orthodox churches. Roman Catholics accounted for about 4% to 6% of the population. Officials from the Greek Catholic Church claimed a membership of about 3% of the population, though the government placed membership counts at less than 1%. Protestant denominations made up about 6% of the population. Some of the Christian groups represented include Old Rite Russian Christian (Orthodox) Church, Protestant Reformed Church, Christian Evangelical Church, Romanian Evangelical Church, Evangelical Augustinian Church, Lutheran Evangelical Church, Unitarian Church of Romania, Baptist Church, Apostolic Church of God (Pentecostal Church), Seventh-day Adventist Church, Armenian Church, Jehovah's Witnesses, the Church of Jesus Christ of Latter-day Saints (Mormons), and the Methodist Church. There are also communities of Jews, Muslims, Baha'is, Zen Buddhists, and members of the Unification Church, along with members of the Society for Krishna Consciousness.

Under Bulgarian influence, the Slavonic rite was maintained in the Romanian Church until the 17th century, when Romanian became the liturgical language. The Romanian Church enjoyed a large measure of autonomy in the Middle Ages and, after Romania achieved full independence from the Turks in 1878, was formally declared independent of the Patriarchate of Constantinople; in the 21st century, it is headed by its own patriarch. The Greek Catholic (Uniate) Church was formed in 1698 by the Transylvanian Orthodox, who acknowledged the jurisdiction of the Holy See. In October 1948, the new Communist regime compelled the Uniate Church to sever its ties with Rome and to merge with the Romanian Orthodox Church. The constitution provides for religious freedom, but the government retains a great deal of legal control over religious groups and activities. The Romanian Orthodox Church holds substantial influence in political and social venues. All religious groups must register with the government. Those that are granted official recognition are eligible for state support. As of 2010, there were 18 officially recognized religions: Romanian Orthodox Church, Orthodox Serb Bishopric of Timişoara, Roman Catholic Church, Greek Catholic Church, Old Rite Russian Christian (Orthodox) Church, Reformed (Protestant) Church, Christian Evangelical Church, Romanian Evangelical Church, Evangelical Augustinian Church, Lutheran Evangelical Church, Unitarian Church, Baptist Church, Pentecostal Church, Seventh-day Adventist Church, Armenian Church, Judaism, Islam, and Jehovah's Witnesses. Proselytizing is not illegal, but minority religions engaging in such activities have reported restrictions and harassment by local government officials. Some tension does exist between religious groups, particularly between the Romanian Orthodox and minority groups.

Romania is strategically located at the crossroads of Europe and Asia. As of 2014, Romania's railroad network included 3,292 km (2,046 mi) of electrified rail, according to the CIA. Standard-gauge railways predominate, totaling 10,781 km (6,699 mi).

The CIA reported that Romania had a total of 84,185 km (52,310 mi) of roads, of which 49,873 km (30,990 mi) were paved. In 2011, there were 237 vehicles per 1,000 people in the country, according to the World Bank. Railroads extend for 11,268 km (7,002 mi). There are 45 airports, which transported 3.1 million passengers in 2014, according to the World Bank.

There were 26 airports with paved runways in 2013. There were also two heliports. Henri Coanda International Airport, near Bucharest, was opened in 1970 and remains the nation's principal international air terminal. Aurel Vlaicu International Airport, also near Bucharest, handles private and charter flights. Other important airports include M. Kogalniceanu at Constanţa and Giarmata at Timişoara.

Romania has approximately 1,731 km (1,076 mi) of navigable waterways. The Danube and, to a lesser extent, the Prut Rivers are suitable for inland navigation. The main Danube ports include Galati, Brăila, and Giurgiu. At Giurgiu, on the main transportation line between Romania and Bulgaria, a roadand-rail bridge was completed in 1954, replacing the former Danube ferry to Ruse, Bulgaria. A major project, the Danube–Black Sea Canal, designed to bypass the shallow, silted arms of the Danube delta, was started in 1949 but abandoned in 1953. It was revived in the early 1980s and opened in 1984. The canal is 64 km (40 mi) long and connects Cernavoda with Constanţa. The Romanian merchant fleet consisted of five vessels of 1,000 gross registered tons (GRT) or more in 2010 and was based in Constanţa, the nation's chief Black Sea port.

Archaeological excavations show that the land that makes up 21st-century Romania has been inhabited for thousands of years. Agriculture was introduced in the 6th century BCE. By the 3rd century BCE, the Cucuteni civilization had produced polychrome pottery. The Dacians, of Thracian stock, had become a distinct people by the end of the 1st century BCE. The kingdom of Dacia reached the highest stage of its development toward the end of the 1st century CE, in the reign of Decebalus (85–106), but after four years of war, Dacia fell to the Roman emperor Trajan in 106 CE. The withdrawal of the Romans in 271 left the Romanians a partly Christianized Dacian-Roman people, speaking Latin and living in towns and villages built on the Roman pattern. In the following centuries, as Dacia was overrun by successive waves of invaders, the early Romanians are believed to have sought refuge in the mountains or to have migrated south of the Danube River. There the Dacian-Romanians, assimilating Slavic influences, became known by the 7th century as Vlachs (Walachians). The Vlachs apparently remained independent of their neighbors but came under Mongol domination in the 13th century.

The establishment of the two principalities of Walachia and Moldavia in the late 13th and early 14th centuries opened one of the most important chapters in the history of Romania. Walachia came under Turkish suzerainty in 1476 and Moldavia in 1513; 13 years later, Transylvania, which had been under Hungarian control since 1003, also passed into Turkish hands. The tide of Ottoman domination began to ebb under Russian pressure in the second half of the 17th century; in 1699, under the Treaty of Karlowitz, Transylvania was taken by Austria (later Austria-Hungary), and, in 1812, Russia obtained Bessarabia, a section of Moldavia, from the Turks. The Congress of Paris in 1856, which ended the Crimean War, guaranteed the autonomy of the principalities of Walachia and Moldavia and forced Russia to return the southernmost part of Bessarabia to Moldavia. The two principalities formed a union in 1859, with Alexandru Ioan Cuza as its first prince. He was replaced in 1866 by Carol I of the house of Hohenzollern-Sigmaringen under a new governing document that proclaimed Romania a constitutional monarchy. At the Congress of Berlin in 1878, Romania obtained full independence from Turkey but returned southern Bessarabia to Russia. Under the rule of Carol I, Romania developed into a modern political and economic unit.

As a result of the Balkan Wars in 1912–13, Romania gained southern Dobruja from Bulgaria. Carol I died in 1914 and was succeeded by Ferdinand I. In World War I, Romania joined the Allies and, as a result, acquired Bessarabia from Russia, Bukovina from Austria, and Transylvania from Hungary. The establishment of a greatly expanded Romania was confirmed in 1919–20 by the treaties of St. Germain, Trianon, and Neuilly. In the early postwar period, Ion Bratianu (son of a 19th-century premier) instituted agrarian and electoral reforms. Both Ferdinand and Bratianu died in 1927. A brief regency period under Iuliu Maniu, Peasant Party leader, was followed in 1930 by the return to Romania of Carol II, who, having earlier renounced his right of succession, now deposed his nine-year-old son, Michael (Mihai), and established a royal dictatorship.

As economic conditions deteriorated, Fascism and anti-Semitism became increasingly powerful, and Carol II sought to appease both Germany and the USSR, which, by August 1939, had concluded their nonaggression agreement. In 1940, Romania ceded Bessarabia and northern Bukovina to the USSR, northern Transylvania to Hungary, and southern Dobruja to Bulgaria. In the same year, Carol II abdicated in favor of his son Michael, and German troops entered the country. Romania joined the Axis in war against the Allies in 1941. As Soviet forces drove into Romania in 1944, a coup overthrew the wartime regime of Gen. Ion Antonescu on 23 August, and Romania joined the Allies against Germany. A Communist-led coalition government under Premier Petru Groza was set up in March 1945. King Michael was forced to abdicate on 30 December 1947, and the Romanian People's Republic was proclaimed. The Paris Peace Treaty of 1947 fixed Romania's frontiers as of 1 January 1941, with the exception of the border with Hungary, which was restored as of 1 January 1938, so northern Transylvania was once again part of the Romanian state.

The Communist constitution of 1948 was superseded in 1952 by a constitution patterned more directly on that of the USSR. In international affairs, Romania followed a distinctly pro-Soviet line, becoming a member of Comecon and the Warsaw Pact. Internally, the regime nationalized the economy and pursued a policy of industrialization and the collectivization of agriculture. During the 1960s, however, and especially after the emergence of Nicolae Ceauşescu as Communist Party and national leader, Romania followed a more independent course, increasing its trade with Western nations and avoiding a definite stand in the Sino-Soviet dispute. In 1967, Romania was the only Communist country that did not break diplomatic relations with Israel following the Six-Day War. In 1968, Romania denounced the Soviet intervention in Czechoslovakia, and the USSR–Romania treaty of friendship and cooperation expired; a new accord was not signed until 1970. Further examples of Romania's independent foreign policy in the 1970s were the gradual improvement of relations with China, numerous bilateral agreements with the nations of Western Europe, and President Ceauşescu's state visit in December 1973 to Washington, where he signed a joint declaration on economic, industrial, and technical cooperation with the United States. In the 1970s and early 1980s, Romania also became increasingly involved in the nonaligned movement. In 1982, Ceauşescu called on the USSR to withdraw from Afghanistan.

In contrast to some other Eastern European countries, there was relatively little political and cultural dissent in Romania during the first 30 years of Communist rule. In 1977, however, about 35,000 miners in the Jiu River valley, west of Bucharest, went on strike because of economic grievances. Afterward, the Romanian Communist Party hierarchy was frequently reshuffled, ostensibly to improve economic management, with Ceauşescu and several members of his family (particularly his wife, Elena) increasing their power.

In the early and mid-1980s, there were a number of work stoppages and strikes caused by food and energy shortages. In early 1987, Ceauşescu indicated that Romania would not follow the reform trend initiated by Mikhail Gorbachev in the USSR.

The progress of perestroika (restructuring) in the Soviet Union, intensified by the wave of peaceful revolutions that rolled across Eastern Europe in the autumn of 1989, only served to highlight the repressiveness of the Ceauşescu regime, which had all but starved and frozen the country to death in its attempt to repay international indebtedness, which Ceauşescu said in April 1989 had been $10 billion. The regime was also single-mindedly pushing ahead with the systemization plan begun in March 1988, which intended to force about half the country's peasants into urbanized agro-industrial complexes by bulldozing their villages.

The policy was especially offensive to the 2.5 million Hungarians in Romania's western regions, who understood the policy to be an attempt to further undercut their cultural autonomy. In mid-December 1989, abysmal economic conditions and ethnic tension led to spontaneous demonstrations in the western city of Timişoara. When the Securitate, Romania's secret police, attempted to deport Laszlo Toekes, a popular clergyman who had been a leading spokesperson for the local Hungarians, thousands of people took to the streets. Troops were summoned, and two days of rioting ensued, during which several thousand citizens were killed.

News of the riot and of the government's handling of it fanned further demonstrations around the country. Probably unwisely, President Ceauşescu went ahead with a planned three-day visit to Iran. Upon his return, he convened a mass rally at which he attempted to portray his opponents as Fascists. Page 624  |  Top of ArticleHowever, the rally turned into an antigovernment demonstration in which the army sided with the demonstrators.

Ceauşescu and his wife attempted to flee the country but were apprehended, tried, and summarily executed on 25 December 1989. Several days of fighting raged as the Securitate and the army battled for power. A hastily assembled Council of National Salvation took power, repealing a number of Ceauşescu's most hated policies and laws. The council's president was Ion Iliescu, a former secretary of the Communist Party, who had been one of several signatories to a letter—made public in March 1989—that accused Ceauşescu of gross mismanagement of Romania's economy. The prime minister, Peter Roman, was also a prominent Communist.

Although the council contained some non-Communists, the majority had been prominent officials in Ceauşescu's regime, which prompted almost continuous public protests. Despite a continued government monopoly on media, political opposition groups managed to rally public support to demand the banning of the Communist Party and the widening of the government. In February 1990, Iliescu agreed, replacing the 145-member Council of National Salvation with a Council of National Unity comprising more than 200 members, including members of opposition parties, national minorities, and former political prisoners. The new council retained the full membership of the former council, and Iliescu retained his presidency.

Parliamentary elections were held in May 1990 against a background of continued civil unrest, especially in the Hungarian west. Although international observers considered the elections to have been generally fair, the National Salvation Front—now a political party—made ruthless use of its media monopoly to take about two-thirds of the parliamentary seats from a divided, disorganized, and inexperienced opposition. Iliescu was elected president with about 85% of the votes in a contest in which there had been more than 86% voter turnout.

The conviction that ex-Communists had stolen the election brought continued demonstrations in Bucharest and elsewhere. In April 1990, in a move that was criticized internationally, the Iliescu government trucked in miners from the northern part of the country, urging them to beat and disperse the demonstrators, ending what threatened to become a coup d'etat against Iliescu.

After the failure of those demonstrations, the opposition began to link up into parties, hoping to challenge Iliescu and his party in the next parliamentary elections, to be held in 1992. Popular discontent, however, continued to find more direct expression. Angry that the promises which had brought them to Bucharest in June had not been kept, the miners returned in September 1991, this time to link up with many of the opposition figures that they earlier had fought to mount a mass attack on the government. Iliescu had no choice but to dismiss Prime Minister Roman, replacing him with Theodor Stolojan, an economist who managed to contain popular discontent until the general elections of September 1992, largely by delaying implementation of economic reforms. The parliamentary elections demonstrated a wide diffusion of political support. Iliescu's National Salvation Front won 28% of the seats, making it the largest party, but the Democratic Convention, an anti-Communist opposition coalition with a strong monarchist wing, took 20%, while former Prime Minister Roman's National Salvation Front, now opposed to Iliescu, took 10%. The remaining 42% of the seats were divided among five other parties.

The popular vote for president showed that Iliescu still had support, although it had dropped to just above 60% of the electorate. The success of his opponent, Emil Constantinescu, a former rector of Bucharest University, demonstrated the continuing hostility to Iliescu and the other ex-Communists who had managed to retain power.

Iliescu's dismissal of Stolojan in November 1992 was widely seen as a recognition of that significant minority's opposition. Iliescu chose Nicolae Văcăroiu, who had no earlier ties to the Ceauşescu or Iliescu governments, as prime minister. However, the move was addressed as much to the International Monetary Fund (IMF) as the rest of the international financial community, which had emerged as Romania's chief source of support. Continued political instability and the fitful pace of privatization, combined with a strong nationalist bloc in the parliament that warned against selling out Romania to foreigners, all kept foreign investment low, a total of only about $785 million for 1990–94. As a consequence, Romania has had to rely upon loans from Western sources, especially the IMF, piling up foreign debt at the rate of about $1 billion a year. In return for this infusion of cash, the foreign donors have set stringent requirements of economic reform, which Romania is not finding easy to meet.

Romania's fitful progress toward democratization exacerbates the social pressures of its continued economic decline. Romanians began the post-Ceauşescu period as among the poorest people in Europe, and their economy worsened for several years. Inflation for 1992 was 210% and 255% for 1993, while unemployment was almost 10%. Most significantly, production fell for the first couple of years after the anti-Communist revolution. Beginning in 1994, however, Romania began slowly turning its economy around. In 1996, it even applied for membership in the EU, although it knew that admission before 2000 was doubtful.

In November 1996, presidential and parliamentary elections were held as the economy, while still fairly grim, continued to improve in several sectors. Popular opposition to the ex-Communist Iliescu had grown strong leading up to the elections, mainly due to broken promises of economic security and widespread corruption that saw the enrichment of a small clique of ex-Communist insiders amid general economic hardships across the country. Iliescu also failed to deliver on many privatization schemes, angering the middle-class merchants. In the election's first round on 3 November, the Democratic Convention Alliance of Opposition Groups, led by Emil Constantinescu, Iliescu's 1990 opponent, earned the highest percentage of votes (30%), followed by Iliescu's Party of Social Democracy (PDSR; 23%) and the Social Democratic Union, then former prime minister Peter Roman's center-left party (13%). In the presidential election, neither Iliescu nor Constantinescu received a majority, so a runoff was held on 17 November in which Constantinescu took 54% of the vote, becoming Romania's first true post-Communist leader. The West was thrilled with the victory, as Constantinescu was seen as significantly more profree market and pro-international investment than Iliescu. The new government immediately began imposing austerity measures, vowing to reduce the deficit significantly by the end of 1997. However, it was hobbled by disagreements among coalition members, and, in March 1998, Page 625  |  Top of Articlethe prime minister, Victor Ciorbea, was replaced by Radu Vasile. The government's position was weakened even further in January 1999 when it backed down in the face of demands by striking coal miners in order to avert potential violence. In December 1999, in order to save face and boost the popularity of the coalition for the upcoming elections, President Constantinescu forced Vasile to resign and replaced him with Mugur Isărescu, the governor of the Romanian National Bank.

By the first half of 2000, the failure of the reformist government to bring about the promised economic recovery had led to widespread disenchantment. Inflation, unemployment, and debt remained serious problems, and Romania had also failed to achieve its major foreign policy objectives—admission to the North Atlantic Treaty Organization (NATO) and the EU. Public discontent had led to a resurgence in the popularity by Iliescu's ex-Communists, who won a decisive victory in the June local elections. At midyear, it was widely expected that the November general elections would bring a change in both the government and the presidency, and it was considered possible that Iliescu himself might stage a political comeback.

Presidential and parliamentary elections were held on 26 November 2000, which were won by Iliescu's PDSR. Iliescu became president after a second round of voting was held on 10 December, defeating extreme right-wing candidate Corneliu Va-dim Tudor of the xenophobic Greater Romania Party (PRM). Tudor has been compared to France's Jean-Marie Le Pen, Russia's Vladimir Zhirinovsky, Austria's Jörg Haider, and the Netherlands' Pym Fortuyn.

Romania joined NATO in 2004. Although between 2000 and 2004 Romania registered some of the highest economic growth rates in Europe, endemic corruption and internal problems within the ruling PDSR led to a surprise victory by the Truth and Justice Alliance in the November 2004 elections. Traian Băsescu, a former sea captain who served as the minister of transportation from 1996 to 2000 and as the mayor of Bucharest from 2000 to 2004, won the presidential elections. The Alliance formed by the National Liberal Party (PNL) and the Democratic Party (PD) maintained a fragile parliamentary majority with the backing of the Democratic Union of Hungarians in Romania (UDMR), the Humanist Party (PUR), and several ethnic minority groups.

Internal problems within the Alliance, the kidnapping of three Romanian journalists in Iraq, and massive floods that covered most of Romania in the spring and summer of 2005 threatened to break the coalition apart. President Băsescu and the new prime minister, Călin Popescu-Tăriceanu, agreed to put their differences aside in order to achieve one of the most important goals for Romania—accession to the EU. Romania and Bulgaria joined the EU on 1 January 2007, raising membership to 27 nations.

In April 2007, parliament voted to suspend President Băsescu on the grounds of abuse of office. Băsescu decided against resigning. An impeachment referendum was held on 19 May 2007, and Băsescu remained in office by popular vote. The ruling PNL was upset in the November 2008 elections, coming in third, behind the Social Democratic Party (PSD), which had 34% of the vote, and the Democratic Liberal Party (PDL), which had 33%. A majority PDL–PSD coalition was formed in December 2008, and Emil Boc was named prime minister. This partnership was short-lived. These international partnerships have not ensured greater stability within the government itself. In October 2009, the PSD resigned from the coalition government after the dismissal of the PSD interior minister Dan Nica, who was fired by Boc after making public comments about the potential for fraud in upcoming presidential elections. The PDL regarded the comments as accusations of imminent fraud, suggesting that the PDL was already planning to compromise the elections. Ten days after the mass resignation, parliament issued a vote of no confidence against the now-minority government, and Boc was ousted as prime minister. President Băsescu nominated Lucian Croitoru, a monetary policy advisor linked to the PDL, for the post of prime minister, but opposition parties rejected the nomination, calling for the appointment of Klaus Iohannis of the Democratic Forum of Germans in Romania as prime minister instead. Amid this controversy, a caretaker government was established, pending presidential elections scheduled for November. However, in the first round of those elections, none of the 12 candidates received an absolute majority. Băsescu reportedly received about one-third of the votes, followed by Mircea Geoanăof the PSD. In the December 2009 runoff, Băsescu was reelected with only 50.3% of the vote, defeating Geoană, who came in with 49.7%.

In 2010, the European parliament approved Romania and Bulgaria's entry into the Schengen area, a no-internal-border-control area comprised of 22 other members of the EU, as well as Iceland, Norway, and Switzerland. Although the two countries had fulfilled all technical entry criteria, their anticipated accession in 2012 was blocked indefinitely by the European Council of Ministers of home affairs on account of their alleged failure to demonstrate sufficient capacity to ensure the security of their external borders. Romania and Bulgaria's Schengen membership has faced political opposition by key EU member states such as France, Germany, and the Netherlands on account of persistent allegations of pervasive corruption and inconsistency in enforcing the rule of law, with France and Germany calling for “irreversible progress” prior to Schengen entry. In 2011, under pressure from the EU, Romania launched a series of high-profile investigations into magistrates and other public officials. In early 2016, Romania still had not joined the Schengen zone, although officials remained hopeful of its eventual accession, despite more than five years of blocked bids.

Protests against Romania's austerity measures turned violent in January 2012, with dozens injured as protesters clashed with police, and ultimately resulted in a new government. The austerity measures, which cut public sector employees' wages by as much as 25%, were unpopular from their inception in 2010, but unrest grew as Romania's economy continued to struggle despite the intensity of budget cuts. After several days, including emergency government meetings called in response to the protests, Prime Minister Boc was ultimately compelled to resign. Victor Ponta of the left-wing Social Liberal Union assumed the office in May 2012, promising to negotiate with the EU in hopes of easing austerity measures.

Ponta's Social Liberal Union received overwhelming support in Romania's parliamentary elections of December 2012, but he and his government were destined to suffer the same fate as his predecessor. Despite modest economic recovery during his time in office, with gross domestic product (GDP) growing by 3.5% in 2013, Ponta was dogged by scandal and, like Boc before him, fell amid popular outrage in the streets of Bucharest. In June 2015, prosecutors interrogated Ponta about suspected Page 626  |  Top of Articleforgery, tax evasion, and money laundering, prompting President Iohannis to call for his resignation. The prime minister was defiant at first, but when tragedy combined with corruption in October, public pressure reached a fever pitch. On 30 October 2015, a fire in Bucharest's Colectiv nightclub claimed the lives of 41 people and led to the arrest of three of the nightclub's owners on the grounds of criminal negligence and illegal operations. The horrific accident sparked broad outrage with as many as 20,000 people taking to the streets of Bucharest, demanding another overhaul of government in hopes of at last rooting out corruption. If the fire was the catalyst, anticorruption was the protest's central theme, with the capitulation of Ponta's government on the minds and lips of the protesters. In November 2015, Ponta agreed to resign his post, saying he hoped that “the government's resignation will satisfy the people who came out in the streets.”

Romania has been a republic since 1947. The Council for National Unity enacted a new constitution for Romania in November 1991, and the document carried many of the hallmarks of Soviet-era constitutions, granting rights in some articles and revoking them in others. In October 2003, the constitution was revised, following a national referendum. The legal system is generally based on Romania's old 1923 constitution and on the constitution of France's Fifth Republic.

The arrangement has a directly elected president who serves for a maximum of two five-year terms; he is head of state. The president, in consultation with the parliament, names the prime minister. The prime minister, in turn, chooses his governing body, which has to be approved by the parliament. The government, together with the president, represents the executive power in the country.

As of 2012, the legislature was made up of two houses: the Senate, with 176 seats (137 directly elected by absolute majority vote in single-seat constituencies and 39 supplementary members directly elected by proportional representation vote in single-seat constituencies), and the Chamber of Deputies, with 412 seats (315 directly elected by absolute majority vote in single-seat constituencies and 97 supplementary members directly elected by proportional representation vote in single seat constituencies). Members of both bodies serve four-year terms. A referendum on modifying the bicameral parliament to a unicameral one and on the reduction of the number of representatives to a maximum of 300 seats was held concurrently with the first round of the November 2009 presidential election. Both propositions were approved with 77.8% and 88.8%, respectively, of the votes cast. However, the government has not yet produced any legislation to enact this change.

Prominent political parties in Romania include the Christian-Democratic National Peasants' Party (PNT-CD), the Democratic Union of Hungarians in Romania (UDMR), the Green Party, the M10 Party, the National Liberal Party (PNL), the National Union for Romania's Progress (UNPR), the New Republic Party (NR), the Popular Movement Party, the Party of the Alliance of Liberals and Democrats (ALDE), the Right Romania Alliance (ARD), the Romanian Social Party (PSRo), the Save Bucharest Union Party (Partidul USB), the Social Democratic Party (PSD), the Social Liberal Union (USL), and the United Romania Party (PRU). However, even this number is but a fraction of the political parties in the early 1990s.

After the coup against Ceauşescu, some 80 political parties appeared; some were new, while others, like the Liberals and the Peasant Party, revived prewar parties that the Communists had outlawed. The dominant party in the 1990 elections, however, proved to be the National Salvation Front (NSF), which took two-thirds of the seats in the National Assembly.

By 1992, the NSF had split over the issue of whether or not to support Iliescu. The pro-Iliescu wing became the Democratic National Salvation Front (NDSF), and an anti-Iliescu wing, headed by ex-prime minister Roman, became the Front for National Salvation (FSN). The PDSR took 28% of the vote and the FSN took 10%.

The second-largest party in the 1992 elections was a coalition called the Democratic Convention of Romania (DCR), which incorporated such parties as the National Peasant Party Christian Democratic (PNTCD), the Movement of Civic Alliance, the Party of Civic Alliance, Liberal Party ’93, and the PSD. There are also small ultranationalist parties, the Party of Romanian National Unity and the Greater Romania Party (PRM), and the Communists have been reborn as the Socialist Labor Party. Despite superficial political differences, all three parties are anti-Hungarian, anti-Roma, and anti-Semitic, as well as antidemocratic.

In the parliamentary elections held on 3 November 1996, the PDSR lost its majority standing, and the DCR won a strong majority. The DCR became the ruling party with 53 seats in the Senate and 122 in the Chamber of Deputies; the PSDR held 41 and 91, respectively; the Social Democratic Union, 23 and 53; UDMR, 11 and 25; Greater Romania Party, 8 and 19; and National Union Party, 7 and 18. Victor Ciorbea, a trade union leader and former mayor of Bucharest, became prime minister, and Emil Constantinescu became president.

Parliamentary and presidential elections were held on 26 November 2000, which were won by the PDSR. The PDSR merged with the PSD and the Humanist Party of Romania to form the Democratic Social Pole of Romania. This coalition won 155 of 346 seats in the Chamber of Deputies and 65 of 143 seats in the Senate. The PRM took 84 seats in the Chamber of Deputies and 37 in the Senate; the Democratic Party took 31 and 13 seats, respectively; the PNL won 30 and 13; the UDMR won 27 and 12; and 18 ethnic parties were represented with 1 seat each in the Chamber of Deputies.

On 28 November 2004, the Truth and Justice Alliance, comprising the PNL and the Democratic Party (PD), scored a surprise presidential victory over the ruling PSD. PSD formed a fragile coalition with UDMR, the Humanist Party (PUR), and several ethnic minorities. The Alliance won 112 of 332 seats in the Chamber of Deputies and 49 of 137 seats in the Senate, while PSD–PUR won 132 and 57, respectively, and PRM 48 and 21. At that time, there were also 18 deputies representing minority populations.

The PNL was upset in the November 2008 elections, coming in third, behind the Democratic Liberal Party (PDL) and the PSD–PC (an alliance of PSD and the Conservative Party). A majority PDL–PSD coalition was formed in December 2008, and Emil Broc was named prime minister. The PSD–PC alliance gained 49 seats in the Senate and 114 in the Chamber of Page 627  |  Top of ArticleDeputies. The PDL took 51 seats in the Senate and 115 in the Chamber. The PNL, with only about 18% of the votes in both houses, retained 28 seats in the Senate and 65 seats in the Chamber. UDMR held 9 and 22 seats in the Senate and Chamber respectively. Ethnic minorities held 18 seats in the Chamber.

The December 2012 parliamentary elections saw a small voter turnout, 40.0%, from which the Social Liberal Union won an overwhelming majority with 60.2% of the votes and 122 seats. The Right Romania Alliance came second in the voting with 16.7% of the vote and 24 seats, followed by the People's Party with 14.7% of the vote and 21 seats. The UDMR also won 9 seats with 5.2% of the vote. No other parties receiving votes won seats.

In the November 2014 presidential election, Klaus Iohannis of the National Liberal Party won the presidency in the second round of elections, despite coming up short in the first round of voting. In the initial round of voting on 2 November 2014, Social Democratic candidate Victor Ponta won the majority of the popular vote with 40.4% to Iohannis's 30.4%. In the second round of voting, however, when the candidates faced off head-to-head on 16 November 2014, Iohannis won a significant majority with 54.4% of the popular vote.

Romania is divided into 41 counties (judete), as well as the municipality of Bucharest, which has separate status. Counties are administered by directly elected municipal councils. Below the counties, there are three other categories of local authority: approximately 2,800 communes (with populations up to 5,000), 280 orase (towns with populations of approximately 5,000–20,000), and 86 municipalities. In the Ceauşescu era, the counties were administered by appointees of the central government, whose responsibility was solely to Bucharest. The Iliescu government attempted to reshape local government, but most sources agree that the result was to further remove authority from the countryside. Much of Romania is deeply rural, with almost no contact between localities or with the central government.

While more than 40% of the Romanian population lives in the rural countryside, attending to a highly fragmented agricultural system, almost 40% of the national wealth is concentrated in Bucharest. As a result, prominent figures from all Romania's main provinces have pleaded for a more decentralized government system. To date, all 41 counties are led by a prefect who is appointed by the government. The prefects respond directly to the Ministry of Public Administration.

Under the provisions of the 2004 reorganization of the judiciary, the highest judicial authority in Romania rests with the Supreme Court (High Court of Justice and Cassation). Its 111 members are appointed for six-year terms by the president in consultation with the Superior Council of Magistrates, which is comprised of the minister of justice, the prosecutor general, 2 civil society representatives appointed by the Senate, and 14 judges and prosecutors elected by their peers.

Below the Supreme Court in the judicial hierarchy are 15 courts of appeal, 42 county-level tribunals (including Bucharest), and 188 first-instance courts (of which only 177 are functioning). In addition, there is a three-tier military court hierarchy comprised of tribunals, the Bucharest Territorial Tribunal, and the Bucharest Military Court of Appeal.

A separate Constitutional Court oversees elections and rules on the constitutionality of laws, treaties, ordinances, and the internal rules of parliament. Its nine members serve nine-year terms, with three members each appointed by the president, the Senate, and the Chamber of Deputies.

Under the law, the courts are independent of the executive branch. As in other EU member countries, the European Court of Justice considers the law of the EU superior to Romania's national laws in areas explicitly legislated by the EU.

The death penalty was abolished in 1989 and prohibited by the 1991 constitution.

The International Institute for Strategic Studies reported that active armed forces in Romania totaled 71,400 members in 2014. The force comprised 42,600 members of the army, 6,900 from the navy, 8,400 from the air force, and 13,500 members of joint forces. There were 79,900 members of the paramilitary. In 2013, armed forces represented 1.6% of the labor force in Romania. Defense spending totaled $2.5 billion in 2014 and accounted for 1.3% of GDP.

The Romanian armed forces were reorganized in the wake of the revolution of 1989–90, which destroyed the Communist armed forces and security establishment. Formerly a member of the Warsaw Pact, Romania joined NATO in 2004. As part of a wide-reaching plan for the reorganization of the army, Romania suspended compulsory military service in October 2006.

Romania participated in Operation Enduring Freedom in Afghanistan (2001–14) and was part of the multinational forces in Iraq (2003–09). As of 2014, Romanian troops served in EU, NATO, Organization for Security and Co-operation in Europe (OSCE), and UN peacekeeping or military missions in eight other countries or regions.

In 2013, Romania introduced a national cyber security strategy to protect the country against cyber attacks.

Romania, which became a member of the UN on 14 December 1955, participates in ECE and several nonregional specialized agencies, such as the World Bank, the ILO, the FAO, UNESCO, UNIDO, and the WHO. Romania served on the UN Security Council from 2004 to 2005. The Romanian government has supported UN missions and operations in Kosovo (est. 1999), Ethiopia and Eritrea (est. 2000), Liberia (est. 2003), Burundi (est. 2004), and Côte d'Ivoire (est. 2004), among others.

Romania is also a member of the WTO, G-9, the Council of Europe, the Black Sea Economic Cooperation Zone, the Euro-Atlantic Partnership Council, the European Bank for Reconstruction and Development, and the OSCE. Romania became a member of NATO in 2004. The country has observer status in the OAS and the Latin American Integration Association (LAIA). Romania joined the EU in 2007.

Romania is part of the Australia Group, the Zangger Committee, the Organization for the Prohibition of Chemical Weapons, and the Nuclear Suppliers Group (London Group). In environmental cooperation, Romania is part of the Antarctic Treaty, the Basel Convention, Conventions on Biological Page 628  |  Top of ArticleDiversity and on Air Pollution, Ramsar, CITES, the Kyoto Protocol, the Montreal Protocol, MARPOL, the Nuclear Test Ban Treaty, and the UN Conventions on the Law of the Sea, on Climate Change, and to Combat Desertification.

The relationship between Romania and neighboring Moldova has been strained, primarily as a result of the political and economic instability within Moldova. Because many Moldovans have ethnic ties to Romania, comparisons between the two countries are often brought into play. Many Moldovans believe that democracy and participation in the EU have been key factors in the prosperity of Romania, where the average worker earns five times more than the average Moldovan. This has sparked political unrest, particularly among younger Moldovans. When the Communist Party gained a majority in the Moldovan parliamentary elections of April 2009, violent protests took place in Chişinău, with some protestors carrying Romanian flags and calling for reunification with Romania. Both the Moldovan government and its Russian ally accused the Romanian government of instigating the riots and attempting to inspire a coup, allegations that Romania promptly denied. The Romanian ambassador was expelled from Moldova, and the Moldovan government announced new visa restrictions on Romanians crossing into Moldova. In response, the Romanian government announced a streamlined citizenship application process that would allow nearly 1 million Moldovans with Romanian ancestry to become Romanian citizens in about six months. Nearly one week after the announcement, the Romanian government announced the receipt of about 650,000 applications. The Moldovan government condemned the action as a threat to the sovereignty and integrity of the country. Officials from the EU criticized the actions of both governments.

Once one of the poorest nations in the region, Romania has slowly developed a more stable economy with modest annual growth. Since the overthrow of Romania's long-standing oppressive Communist regime, the government has initiated programs of free market reform, liberalization of the economy, and privatization of industry. Major industries include electric machinery and equipment, textiles and shoes, mining, timber, and petroleum refining. Romania's natural resources are abundant, including a plethora of energy sources and fertile farmland.

The basic organization of economic management in Romania was once highly centralized, like its original Soviet model, with few of the modifications introduced elsewhere in Eastern Europe. During the late 1970s and in the 1980s, the continued emphasis on industrial expansion and consequent neglect of agriculture led to food shortages and rationing. Romania's economic problems in the 1980s were exacerbated by the government's program to reduce foreign debt. The debt was indeed reduced but at the cost of industrial development.

The transition to a market economy also proved extremely painful. By 1992, GDP had fallen by 9.0%, industrial production had fallen 47.0%, and inflation had reached 200.0%. Growth returned weakly in 1993, with GDP increasing 1.0%, but then gained some momentum, rising 3.9% in 1994, 7.1% in 1995, and 4.0% in 1996. In 1997, the government entered into an arrangement with the IMF for a standby agreement (SBA) supported by a credit line of $414 million. The agreement was suspended, however, because of the government's slowness to implement agricultural reform. The effects of the Russian financial crisis in 1998, which came to a head in August, spread quickly to Romania, helping to produce a further contraction of 2.0% of GDP for the year. In August 1999, the government entered into another SBA with the IMF. In October 2001, the government entered into its third SBA arrangement with the IMF, which was successfully completed in October 2003. In July 2004, a standby agreement was signed with the IMF. The agreement was completed in two years and was aimed at decreasing the account deficit and the inflation rate through a mix of monetary policies and structural reforms.

In 2007, Romania joined the EU, and the nation counts fellow member states as its most important trading partners, the largest being Germany and Italy. A reliance on foreign investment and the export market resulted in recession beginning in late 2008 with the onset of the global financial crisis. In 2009, the real GDP growth rate was an alarming -7.1%, as the Romanian economy contracted sharply amid global recession.

In March 2009, the IMF and other lenders agreed to a loan package of up to $27 billion. In June 2010, as Romania continued to struggle with budget deficits and a sluggish global economy, Prime Minister Boc proposed austerity measures that would cut public sector job salaries by 25% and public pensions by 15%. Of the roughly 22 million people in Romania, 1.4 million are public sector employees. The government indicated that, in addition to the salary and pension cuts, 125,000 of those jobs would need to be slashed in 2011 to ease pressure on Romania's budget.

In November 2010, a new wave of international bailout funds was released to the Romanian government. Rocky politics and constantly changing tax policies in Romania have made it difficult to incorporate previous funds. However, agreements made with the IMF and the European Commission showed some hope for Romania's recession-hit economy.

In March 2011, Romania agreed to another financial package with the IMF, EU, and World Bank in hopes of stabilizing its economy and spurring economic growth. The agreement, which would last 24 months, was considered a stopgap and was only a fraction of the initial emergency assistance Romania had received but still a sizable sum at $6.6 billion. The funds were intended to improve financial discipline, to promote structural reforms, and to shore up the Romanian financial sector's stability as the economy pulled out of recession. The fund helped to inspire confidence in the improving stability of Romania's economy but was not ultimately necessary for reigniting growth, and none of the money was drawn out during the two-year period it was accessible.

In April 2011, Romania's industrial production increased during the first quarter of the year. By February, industrial output had advanced by 12.7%. These numbers showed promise for the country that had been suffering due to the global economic crisis. At the end of 2011, Romania registered its first economic growth since 2008, with GDP growing by 1.1%.

Although GDP growth slowed to 0.6% in 2012, the economy nonetheless avoided slipping back into recession, and Romania's economic situation continued to improve. Driven primarily by improved industrial exports, with additional help from good agricultural harvests, Romania registered positive economic growth from 2011 to 2015, with GDP growing by 3.5% in 2013, 2.8% in 2014, and 3.4% in 2015. In addition, unemployment fell to an estimated 6.3% in 2015, with the Page 629  |  Top of Articlebudget deficit reduced to 2.3% of GDP, meeting the government's annual target.

The CIA estimated that in 2015 the GDP of Romania was $411.1 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $20,600. The average inflation rate was -0.6%. It was estimated that agriculture accounted for 11.8% of GDP; industry, 36.1%; and services, 52.1%.

According to the World Bank, remittances from citizens living abroad totaled $3.4 billion in 2014 and accounted for approximately 1.7% of GDP.

The World Bank reported that in 2014 household final consumption expenditure in Romania totaled $124.8 billion or about $4,727 per capita, measured in current US dollars rather than PPP. Household final consumption expenditure includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding the purchases of dwellings. It was estimated that household final consumption expenditure was growing at an average annual rate of 6.2%.

As of 2014, according to a study by the World Bank, actual individual consumption in Romania was 63.0%. The World Bank also estimated that in 2010 Romania's households spent 45.6% of their total consumption on food and beverages, 6.1% on clothes and footwear, 0.1% on housing, 12.0% on energy, 5.8% on transportation, 1.0% on education, 4.4% on health, 2.6% on personal care, 5.6% on communications, 0.3% on financial services, and 15.8% on other goods and services.

Eurostat estimated that in 2012 about 22.4% of the population subsisted on an income below the poverty line established by Romania's government.

As of 2015, Romania had a total labor force of 9.3 million people, according to the CIA. In 2013, the CIA estimated that 27.9% of workers were employed in agriculture, 28.2% in industry, and 43.9% in the service sector. Unemployment fell from 6.8% in 2014 to 6.3% in 2015.

The Romanian economy is in the process of privatization, but there is still significant state control. Labor legislation adopted in 1991 guarantees the right of private sector employees to associate freely, organize and join unions, bargain collectively, and carry out strikes, according to 2014 US Department of State reports. In 2012, Romania had a trade union density rate of 19.8%, according to the International Labor Organization. Unions are permitted to strike, but only a 48-hour advance notice is given to employers. While not obligatory, many unions seek arbitration from the Ministry of Labor and Social Protection, according to US State Department data. However, there have been complaints that the courts are biased toward ruling strikes illegal. Also, while the law protects the right to bargain collectively, contracts arising from collective bargaining have not been consistently enforced. In 2013, Romania's collective bargaining coverage rate was 35.0%, as reported by the International Labor Organization.

Most employees work a five-day, 40-hour week with overtime pay rates for weekends, holidays, and work over 40 hours. While the US Department of State reported that the minimum wage had increased from $230 per month in January of 2014 to $240 in July of the same year, and while the government also subsidizes necessities such as housing and healthcare, these efforts do not provide a decent standard of living for a worker and family. The minimum wage hovered just below income level for those at risk of poverty ($246), according to Eurostat and reported by the US Department of State. Children under the age of 16 years are not permitted to work, although 15-year-olds may be employed with parental consent. Minors are also banned from working under hazardous conditions. However, child labor remains a problem in Romania. Neither the government nor industry has the resources to enforce safety and health standards in the workplace.

As of 2013, 60.4% of Romania's land was devoted to agriculture. The country's major crops include grains, potatoes, forage, maize, legumes, sunflower seeds, fruits, and vegetables. According to the UN Food and Agriculture Organization (FAO), Romanian farms produced 12.8 million tons of cereals in 2012, along with 1.9 million tons of fruit and 3.5 million tons of vegetables.

Although under Communism the emphasis had been on industrialization, Romania still has a substantial agricultural sector. Grain growing has been the traditional agricultural pursuit, but the acreage has been reduced since World War II, and more area has been assigned to industrial and fodder crops.

The government began forming collective farms in 1949 and had largely completed the collectivization process by 1962. By 1985, of a total of 15,020,178 ha (37,115,460 ac) of agricultural land, 29.7% was in state farms, with another 60.8% in large cooperative farms. The socialized sector consisted of 3,745 collectives, 419 state farms, and 573 farming mechanization units by 1985. The Land Reform of 1991 returned 70.0% of agricultural land to private ownership, and by 2002, 96.0% of farms were privately owned. In 2003, Romania had 4,484,890 agricultural holdings. By 2007, the number of agricultural holdings had dropped to 3,931,350, and by 2013, that number had fallen to 3,563,770. Almost all farms were family owned, with most below 10 ha (25 ac).

Animal production in Romania has developed somewhat more rapidly than crop production. The 1970 value of total livestock production, including the increase in herds and flocks, as well as livestock products, was slightly more than double the level of 1938, and the 1974 value was 34% above that of 1970. In view of the initially low level of Romanian livestock production, however, development has been slow. The major reasons for the inadequate increases had been lack of economic incentives, insufficient fodder, and inadequate shelter. Since the overthrow of the Ceaşescu regime in 1989, privatization of much of the grazing land has begun. In order to improve livestock raising, the government continues to stress agricultural modernization. Livestock productivity during 2002–04 was 10.8% higher than during 1999–2001.

After several years of livestock reduction, the hog and poultry inventories rose at the end of 1995, due to increases in the private sector. Sheep numbers dropped because of exports. State farms were also forced to cut their flocks due to reduced grazing land and financial difficulties.

The FAO reported that Romania dedicated 4.7 million ha (11.6 million ac) to permanent pasture or meadow in 2013. During that year, the country tended 80.1 million chickens, 2.0 million head of cattle, 5.2 million pigs, and 10.0 million sheep and goats. Food production from animals amounted to 96,179 tons of beef and buffalo, 396,070 tons of pork, 322,893 tons of poultry, 319,389 tons of eggs, and 5 million tons of milk. Romania also produced 13,244 tons of cattle hide and 18,600 tons of raw wool.

Romania lost an important fishing region and nearly all its caviar-producing lakes with the cession of Bessarabia to the USSR in 1940. However, the Black Sea, the Danube and its floodlands, as well as other rivers, lakes, and ponds, are favorable to the development of the fishing industry, which expanded rapidly during the early 1970s. About 90% of the fish comes from the Danube floodlands and delta and 10% from the Black Sea.

In 2014, the annual capture totaled 4,888 tons, while aquaculture production totaled 11,037 tons, according to the FAO. Romania exported 4,899 tons of seafood products, worth $16.9 million, in 2013.

According to the FAO, forests covered 6.7 million ha (16.6 million ac), or 29.2% of total land area in 2013. The FAO estimated the 2009 roundwood production at 15.1 million cu m (533.3 million cu ft). The export value of all forest products, including roundwood, totaled $2.1 billion.

In 2012, forests covered 6.9 million ha (17.1 million ac), with 51.0% of forests privately owned. The forests are found mainly in the Carpathian Mountains and in Transylvania and are 70.0% hardwood (mostly beech and oak) and 30.0% softwood (mostly spruce and pine). Between 1976 and 1985, a reforestation effort occurred. After the collapse of the Communist regime, domestic demand, exports, and reforestation plummeted. Between 1990 and 2015, forest cover increased at an annual rate of 0.3%.

Illegal logging is a significant concern, with an estimated 80.0 million cu m (2.8 billion cu ft) of timber illegally cut down in the 20 years after the fall of Communism in 1989. A new logging code limiting sales of Romanian timber was passed in 2015, and in 2016 President Iohannis declared illegal logging a threat to national security. Since trade liberalization in 1997, Romania's wood industry has expanded. In 2015, an estimated 51,600 people were employed in Romania's forestry sector.

Romania's production of metals, industrial minerals, and mineral fuels was mainly of regional importance. The country produces aluminum, copper, lead, zinc, manganese, steel, and ferroalloys.

Mining and quarrying employed about 60,600 people in 2013, including 29,300 in the manufacture of basic metals.

Mined copper production (gross weight) totaled 6,800 tons in 2013, up from 1,000 tons in 2009. Bismuth (metal) output in 2009 was estimated at 40 tons, while gold mine output (metal content) in 2010 came to 400 kg. Silver mine production (metal content) totaled 18 tons in 2009. Among industrial minerals in 2009, Romania produced bentonite, feldspar, fluorspar, graphite, gypsum (600,000 tons), kaolin, lime (1.6 million tons), nitrogen (content of ammonia), pyrites, salt, sand and gravel, caustic soda, soda ash, sulfur, and talc.

Metals and metalworking in the region were well-documented by Roman times when Romania and Bulgaria, respectively known as Dacia and Thrace, were important sources of base and precious metals. Gold and nonferrous metals mined in the region remained attractive investment opportunities.

In October 2011, Romania launched the sale of its biggest copper mine, Copru Min SA Abrud, which sits on 60% of the country's copper reserves, or about 900,000 tons.

The International Energy Agency reported in 2013 that Romania produced 58.9 billion kWh of electricity, including 9.3 billion kWh from gas-fired plants, 11.6 billion kWh from nuclear power plants, 4.5 billion kWh from wind, 17.0 billion kWh from coal, 15.3 billion kWh from hydroelectric power plants, and 560.0 million kWh from oil. Romania imported another 2.7 billion kWh and exported 4.8 billion kWh, for a total domestic supply of 56.9 billion kWh. Romania consumed 49.9 billion kWh, or 2,490 kWh per capita.

Romania's electric power is mostly generated by conventional thermal fuel plants, followed by hydroelectric and a single nuclear power plant. As of 2016, Romania's Cernavoda nuclear plant had two operating reactors. The first one has been in operation since 1996 and the second one since 2007.

In 2013, crude oil production totaled 4.0 million tons. Romania imported another 5.6 million tons of crude oil and produced 10.4 million tons of oil products in domestic refineries. Exports of oil products totaled 3.8 million tons. Domestic oil consumption totaled 7.1 million tons, including 4.9 million tons in the transportation sector, 196,000 tons in the residential sector, 818,000 tons in the industrial sector, 262,000 tons in the agriculture and forestry sector, and 78,000 tons in the commercial and public services sector. Natural gas consumption totaled 6.5 million tons of oil equivalent.

As of 2015, Romania's crude oil reserves were 600 million barrels. Romania's crude oil production averaged 83,350 barrels per day in 2014, compared with 112,000 barrels per day in 2009. According to CIA statistics, Romania ranked 54th in the world in refined petroleum production in 2012 with 197,300 barrels per day.

In 2014, Romania had proven reserves of 105.5 billion cu m (3.7 trillion cu ft) of natural gas, up from 101.9 billion cu m (3.6 trillion cu ft) in 2005. Production of natural gas in 2015 was 11.3 billion cu m (399 billion cu ft), down from 13.3 billion cu m (470 billion cubic ft) in 2002.

In 2013, Romania produced 24.7 million tons of coal and imported an additional 1.1 million tons to meet domestic demand. Romania's coal production consists of low-quality brown coal (lignite), while imports consist of subbituminous coal and anthracite for use in thermal power plants.

In 2015, the CIA reported industry had contributed to 36.1% of GDP, up 4.0% from the year before. According to the CIA, the major industries listed in order of annual output (greatest to least) were electric machinery and equipment, textiles and footwear, light machinery, auto assembly, mining, timber, construction materials, metallurgy, chemicals, food processing, and petroleum refining.

According to the International Organization of Motor Vehicles (OICA), a total of 68,761 automobiles were manufactured in 2001, and 759 heavy trucks were produced in 2000. For 2014, the OICA reported Romania manufactured 391,434 automobiles, down 4.8% from the previous year.

In 2015, Romania ranked 54th on INSEAD's Global Innovation Index.

Industrial development received about half of all investment during the 1951–80 period. As officially measured, the average annual growth rate in gross industrial production between 1950 and 1980 was 12.3%, one of the highest in Eastern Europe. In 1993, however, industrial production was at only 47.0% of the 1989 level. The next year, industrial production increased by 3.3%. In 1995, it increased by 9.4% in absolute volume and was 13% higher than the 1992 output. In 1996, industrial production increased by 9.9% with the largest increases coming in the processing industry (12.5%) and machine and electronics (27.3%). After the Russian collapse of 1997, however, the industrial growth rate for 1998 was -17.0%. Industrial production picked up after Romania began to recover from its recession in 2000, and in 2001, the industrial growth rate was 6.5%.

Romania has been fairly successful in privatizing its industrial base; in 2005, less than 5% of the industrial assets were still in the hands of the state. While some privatizations have been plagued by corruption accusations, and while some of the newly privatized companies are not yet economically viable, the rest have benefited from switching leadership. Some of the success stories include the privatization of Dacia (Romania's main car manufacturer) and of Petrom (the national oil company), which were acquired by Renault and OMV, respectively. Among the industrial giants that have passed into private hands are RAFO (one of the largest oil refineries in Romania and Eastern Europe), acquired by the British company Balkan Petroleum in 2003, and Sidex Galati (a major iron steel plant), bought by Mittal Steel in 2001. The privatization of the bank sector has also been hailed as an important step toward a functional market economy. Banca Comerciala Romana (BCR), one of Romania's largest state-owned banks, was acquired by Erste Bank in 2006.

In July 2011, European Aerospace and Defense Company (EADS) opened a large plant in Romania to produce parts for Airbus. The plant added 500 jobs to the town of Ghimbav after a $56 million investment to open it.

Patent applications in science and technology as of 2013, according to the World Bank, totaled 993 in Romania. There has been a slow but steady increase in funds allocated to research and development (R&D) in Romania. In 2013, total R&D expenditures amounted to 0.4% of GDP. In that same year, there were 945 researchers engaged in R&D per 1 million people. High-technology exports in 2013 were valued at $2.9 billion, or 6.0% of the country's manufactured exports.

Among Romania's primary research institutions are the Romanian Academy, founded in 1866, which has sections of mathematical sciences, physical sciences, chemical sciences, biological sciences, economic and sociological sciences, information and technological sciences, agricultural sciences and forestry, and medical sciences; the Academy of Medical Sciences (1935); and the Academy of Agricultural and Forestry Sciences (1969). All three organizations are located in Bucharest.

In 2011, Romania had 56 public and 32 accredited private institutions of higher education.

The distribution of industrial goods is similar to that which exists in most European countries. The chief seaport is at Constanţa. Cluj-Napoca, Timişoara, Iaşi, Craiova, and Braşov serve as regional industrial centers and railroad hubs. Oradea serves as a regional marketing and shipping center for livestock and agriculture. Arad is a regional commercial and industrial center in the west, while Pitesti serves as a hub for the south-central region. Turgu-Mures serves as a regional industrial and agricultural center for central Romania.

Romania's retail trade sector remains highly fragmented and dominated by many small independent outlets. Retail outlets include specialty shops, supermarkets, hypermarkets, cash and carry vendors, department stores, gas station convenience stores, kiosks, street vendors, open-air markets, and wholesale centers. Although supermarkets and shopping malls have begun to appear in Romania, kiosks remain the largest type of retail outlet. About 15,000 are located throughout the country. Specialized shops are usually found in the large cities.

The franchising system has been slow to develop in Romania, due mainly to the large amount of initial capital required for start-up. However, the number of franchisers in the country continues to grow. In 2000, there were 18 franchise chains doing business in Romania. By 2003, that number had risen to 60, and by 2004, there were 124 franchise networks in operation. As of September 2005, there were 210 franchise companies in Romania. US-based franchise operations in Romania include McDonald's, Pizza Hut, KFC, Hertz, Budget, and the American Life Insurance Company.

E-commerce has only begun to appear in Romania. Major obstacles to e-commerce include the low rate of Internet usage, limited use of credit cards, and a lack of legal support. In addition, merchandise sold through the country's e-commerce system generally consists of artifacts, CDs, books, and toys. Payment is made offline as either cash to the supplier, through a payment order, or by post office transaction. Business-to-business (B2B) e-commerce appears to have better prospects, since three major Romanian banks have developed online systems that support B2B e-commerce. Most large banks in Romania offer their clients (especially businesses) e-banking services. Some also offer Internet banking. As of March 2005, there were 4.9 million Internet users in Romania.

Romania has a standard 19% value-added tax (VAT) rate on most goods and services, although a lower rate of 7% is applied to books, newspapers, hotel services, medicines, and certain financial services.

Stores are generally open daily, except Sunday, from 9 a.m. to 6 p.m., although some supermarkets are open later. Banks are open from 9 a.m. to 5 p.m., Monday through Friday. Office hours are generally from 9 a.m. to 6 p.m., Monday through Friday.

Before 1990, foreign trade was a state monopoly carried out through export-import agencies under the administration of the Ministry of Foreign Trade. Since World War II, the orientation and structure of Romanian foreign trade have shifted. Before the war, cereals, oil, timber, livestock, and animal derivatives accounted for over 90% of total exports, while consumer goods (60%) and raw materials (20%) accounted for the bulk of the imports. Under the Communist industrialization program, structural changes were particularly striking in exports, with machinery and nonedible consumer goods emerging as important export items. Foreign trade was in surplus throughout the 1980s but fell into deficit in the 1990s. Romania's increasing trade deficit after 1994 was due in large part to the depreciation of its currency, large energy imports (despite large domestic reserves), and the loss of two important export markets due to international sanctions: Iraq and the former Yugoslavia (Serbia and Montenegro). The low quality of Romania's export products has also contributed to its large trade deficits. Additionally, with 80% of all imports taking the form of raw materials—principally oil, natural gas, and minerals—the country has little foreign exchange to import the equipment and technology needed to modernize its sluggish industrial sector.

According to UN Comtrade data, exports in 2014 were estimated at $69.9 billion, up from $10.4 billion in 2000 and $40.7 billion in 2009. The major export categories were machinery and equipment, motor vehicles and parts, oil and mineral fuels, furniture, cereals, and apparel that was not knitted. Romania's main export partners were Germany, Italy, France, Hungary, Turkey, and the United Kingdom.

Imports stood at $77.9 billion in 2014, up from $13.1 billion in 2000 and $50.3 billion in 2009. The major import categories were machinery and equipment, oil and mineral fuels, motor vehicles and parts, plastics, pharmaceuticals, and iron and steel. Romania's main import partners were Germany, Italy, Hungary, France, Russia, and the Netherlands.

Principal Trading Partners–Romania (2014) SOURCE: International Monetary Fund Direction of Trade Statistics, http://data.imf.org SOURCE: International Monetary Fund Direction of Trade Statistics, http://data.imf.org

Balance of Payments–Romania (2014) SOURCE: International Monetary Fund Balance of Payments and International Investment Position Statistics, http://data.imf.org SOURCE: International Monetary Fund Balance of Payments and International Investment Position Statistics, http://data.imf.org

Trade with the EU countries, especially Germany, has increased substantially, largely because of Romania's expanding need for advanced Western technology and equipment.

Trade with Western countries has involved growing amounts of credit beginning in the late 20th century. As a result of a series of devaluations of the Romanian leu dating from February 1990, Western imports became increasingly costly, while the quality of Romania's exports significantly declined. Romania's poor performance was additionally due to its reliance on the importation of raw materials—such as oil, natural gas, and minerals—which accounted for as much as 80% of imports in 1995, leaving little exchange currency for equipment and technology.

The country's international risk ratings have made it difficult for Romania to borrow from the private international credit market. Current account deficits have been financed in large measure by loans and grants from international financial institutions, but Romania has attempted to diversify its sources of external financing. In December 2010, Romania's external debt stood at $122.8 billion, up from $11.6 billion in 2001.

In July 2011, Fitch Ratings raised Romania's credit rating to the lowest safe investment grade (BBB—) for the first time. It was also the first upgrade for Romania in almost three years. In 2014, Romania had a current account balance of -$950.8 million, according to the IMF.

Romanian banks were nationalized in 1948. Established in 1880, the bank of issue is the National Bank of Romania, which also Page 633  |  Top of Articleextends short-term loans to state enterprises and supervises their financial activities. Many of the other major banks have been privatized. The BRD–Groupe Société Générale, formerly the Romanian Bank for Development (1990), finances investments of state enterprises and institutions and grants long-term credit. As investments increased in volume, this bank was required to intensify its control over the use of funds allocated for investment. In 1998, the French firm Société Générale became a majority owner. Banca Comercială Romănă (BCR) was formerly the Romanian Bank for Foreign Trade, which conducted operations with foreign countries. It was acquired by the Austrian Erste Bank in 2006. Savings are deposited with the Loans and Savings Bank (CEC). In 1974, New York's Manufacturers Hanover Trust opened an office in Bucharest, the first such instance for a Western commercial bank in a Communist nation.

Romania has generally been cautious in its approach to banking reform. Since 1990, the financial sector has undergone a fundamental overhaul, although the pace of change has been slower than elsewhere in the region. The number of banks rose from 5 in December 1990 to 41 by the end of 2000—including 4 branches of foreign banks, 4 branches of joint ventures based abroad, and 33 domestic banks. The foreign specialized banks—for development, agriculture, and foreign trade—still handle almost all the business in these areas. The Romanian Commercial Bank is still the banker to most Romanian firms, while the Savings Bank retains a virtual monopoly on personal savings deposits. At decade's end, Romania's financial institutions, like the rest of its economy, remained in severe and protracted crisis. Despite repeated calls from the IMF to privatize, the seven state-owned banks still controlled 70% of all assets in Romania's banks. Moreover, these banks continued to be plagued by bad debt.

The IMF reported that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $2.1 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small-time deposits, and money market mutual funds—was $9.3 billion. According to the CIA, in December 2014, the discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 1.8%. The commercial bank prime lending rate, the rate at which banks lend to customers, was 6.9% as of December 2015. Romania's stock of foreign exchange reserves and gold was valued at $37.3 billion. The share of gold bullion was 9.1% of total reserves, or 103.7 tons.

Romania set up its first postwar stock exchange in 1995, after the enabling legislation had been delayed for several years. The RASDAQ (Romanian Association of Securities Dealers Automatic Quotation), an over-the-counter securities market, opened in 1996. As of 2001, the total market capitalization of the RASDAQ was $2.1 billion, up 98% from the previous year. By 2004, a total of 4,030 companies were listed on the combined Bucharest Stock Exchange and RASDAQ exchanges, which had a combined market capitalization of $11.8 billion. In 2004, the BET Index rose 101% from the previous year to 4,364.7. By 2010, the combined market capitalization of BET and RASDAQ was $33 billion.

During the Communist era, all commercial insurance was nationalized. Since 1991, casualty, automobile, and life insurance have been made available through private insurers with foreign partners. Private insurers are only legally permitted as joint-stock or limited liability companies. Policies available include life, automobile, maritime and transport, aircraft, fire, civil liability, credit and guarantee, and agricultural insurance, with third-party auto insurance compulsory. Foreign insurance companies and agencies are allowed to set up representative offices within Romania, under certain regulations.

According to the Insurance Information Institute (III), ING Life Insurance ($559.6 million) and BCR Vienna Life Insurance ($64.1 million) were the primary life insurers for 2013, followed by Metropolitan Life ($42.2 million), while Astra ($272.6 million) and Omniasig Vienna Insurance Group ($264.8 million) were the primary nonlife insurers, followed by Allianz-Tiriac Insurance ($247.6 million). III reported nonlife insurance premiums in Romania came to $1.9 billion, while life insurance premiums came to $456.0 million of the nearly $2.4 billion spent in 2014.

Public Finance–Romania (2013) SOURCE: International Monetary Fund Government Finance Statistics http://data.imf.org SOURCE: International Monetary Fund Government Finance Statistics http://data.imf.org

The annual budget is presented to the Grand National Assembly around December and becomes effective for the fiscal year on 1 January. The state budget, prepared by the Ministry of Finance, is a central part of the financial plan for the whole economy. The reduction of the growth rate of expenditures during the early 1980s was in keeping with an economic stabilization program designed to hold down domestic investment and consumption. As a result of fiscal reforms begun since the fall of the Ceauşescu regime in December 1989, adherence to IMF fiscal targets, and an unanticipated inflation-fed revenue windfall during the first half, the central government unofficially recorded a relatively modest deficit for 1991. Privatization of industry was accomplished in 1992 with the transfer of 30% of the shares of about 6,000 state-owned businesses to five private ownership funds, in which each adult citizen received certificates of Page 634  |  Top of Articleownership. As of the first decade of the 21st century, the government's priorities included reigning in of its fiscal policy, continuing to develop its relationship with the IMF, and continuing the process of privatization.

The CIA estimated that in 2015 the budget of Romania included $55.8 billion in public revenue and $59.9 billion in public expenditures. The budget deficit amounted to 2.3% of GDP. Public debt was 39.9% of GDP.

In 2015, personal income was generally taxed at a flat rate of 16%. Income from real estate sales and from gambling were taxed at different rates. Real estate income was taxed at a rate dependent on the sale value of the real estate and how long the real estate was owned. Gambling income was taxed at a rate dependent on the gambler's income.

Social security contributions by employers were 15.8%, 20.8%, or 25.8% of the employee's gross salary, not including the standard 5.2% for the health fund, 0.9% for medical leave, and 0.5% for the unemployment fund, among other taxes. In 2015, employees contributed 16.5% of their gross salary.

The corporate income tax was a flat rate of 16%. Capital gains were taxed as income and thus assessed at the standard 16%.

Romania levied turnover taxes, essentially VAT, on goods and services at a standard rate of 20%. Certain goods and services were exempt and taxed at a 5% or 9% rate.

Romania joined the European Free Trade Association (EFTA) in December 1992 and, early in 1993, signed an association agreement with the EU that provided for Romania to adapt to EU economic-commercial standards over a 10-year period. Under an interim collaborative agreement effective 1 May 1993, a revised Romanian import tariff schedule was introduced with preferential tariffs for imports from EU and EFTA member nations.

Since joining the EU in 2007, Romania uses the single external tariff—or Common Customs Tariff (CCT)—applied by all member states to imports coming from third countries. In 2016, the World Bank ranked Romania 37 out of 183 economies for ease of trade across borders.

Foreign investment was negligible before the overthrow of the Communist regime. A new foreign investment law was enacted in 1991. Incentives to foreign investors include tax holidays, full foreign ownership of an enterprise, and full conversion and repatriation of after-tax profits. However, the latter is a drawn-out process because of the central bank's shortage of hard currency.

In 1997, the inflow of foreign direct investment (FDI) reached $1.2 billion and then rose to over $2.0 billion in 1998. Affected by the Russian financial crisis of August 1998, FDI inflow fell to a little over $1.0 billion in 1999. Annual FDI inflow averaged about $1.1 billion from 2000 to 2002. The FDI inflow continued to grow, reaching $1.8 billion in 2003 and $6.4 billion in 2004. According to World Bank figures, in 2014, FDI in Romania was a net inflow of $3.7 billion. FDI represented 1.9% of GDP.

France, Austria, the Netherlands, Germany, the United States, and Italy have been the largest sources of FDI. The largest foreign operations are in the automobile, steel, oil, and banking industries.

The economy of Romania before 1990 was centrally planned and, for the most part, under complete state control. The nationalized industries and other economic enterprises operated within the state economic plan and were governed by the directives issued by the pertinent ministries. Economic planning, conducted by the State Planning Commission, emulated the Soviet example.

Nationalization of industry, mining, transportation, banking, and insurance on 11 June 1948 was followed by one-year economic plans in 1949 and 1950. These were succeeded by the first five-year plan (1951–55), which laid the groundwork for rapid industrialization, with emphasis on heavy industry, primarily machine-building. The state's second five-year plan (1956–60) provided for an increase of industrialization by 60.0%–65.0%. Greater attention was given to consumer goods and to agriculture. A subsequent six-year plan (1960–65) envisaged an overall industrial increase of 110.0%, especially in producer goods. The five-year plan for 1966–70 realized an overall industrial increase of 73.0%. The five-year plans for 1971–75, 1976–80, and 1981–85 called for further industrial expansion, and, according to official figures, during 1966–85 industrial production grew by 9.5% annually. The eighth five-year plan, for 1986–90, projected a 13.3%–14.2% annual increase in Romania's net industrial production.

In the farming sector, the government has assiduously pursued a policy of collectivization. By virtue of the 22 March 1945 land reform, most farms over 50 ha (123 ac)—a total of about 1.5 million ha (3.7 million ac)—were confiscated without compensation. In 1949, the remaining large private farms were seized, and their 500,000 ha (1,236,000 ac) organized into state farms. Various pressures, including coercion, were used to force peasants into joining. In April 1962, collectivization was announced as virtually completed, although there were farms, especially in remote areas, that were left in the hands of their rightful owners. Agricultural development in the following years was comparatively neglected.

As of 1 January 1979, Romania began implementing the new economic-financial mechanism, an attempt to introduce into the Romanian economy the principle of workers' self-management as previously developed elsewhere in Eastern Europe, notably in the former Yugoslavia and in Hungary. Accordingly, autonomous production units were expected to plan for their own revenues, expenditures, and manpower needs. These separate plans were, however, to be harmonized with the national economic plan, so that Romania's centralized system of goal and price setting was not significantly altered.

One of the major economic targets in the 1980s was the reduction of foreign debt, which was achieved at the cost of drastic austerity measures and reduced industrial growth. After the fall of Communism, a major objective was the privatization of 6,200 state enterprises. The economy was to be completely restructured, with the emphasis on private ownership and adherence to the market for the allocation of resources. By late 1996, nearly all the country's agricultural land had been returned to private ownership, but only 65% of all eligible recipients had Page 635  |  Top of Articlebeen officially given title. By 2002, Romania had privatized many major state-owned enterprises, with the help of the World Bank, the IMF, and the EU. The private sector in 2002 accounted for an estimated 65% of GDP.

Economic growth declined in the late 1990s but picked up in the early 2000s. Inflation, once a problem (it stood at 22.5% at the end of 2002), had been reduced to single figures in 2005 and dropped to 6.0% by 2006. In 2004, the FDI in Romania reached $6.4 billion (second only to the Czech Republic in Europe), while the GDP registered a whopping 8.3% increase (second only to Latvia in Europe). The economy grew at a rate of about 8.0% in the following years.

In December 2004, Romania closed the preaccession negotiation with the EU. In October 2004, it received functionally market economy status, and in 2007, it joined the EU. However, Romania has struggled to respond to EU market pressures. Along with its southern neighbor, Bulgaria, Romania remains the poorest EU member country. While some sectors have registered significant progress, others are still lagging. For example, Romania's main car manufacturer, Dacia—which is owned by Renault—has been successful in acquiring an important share of the internal and external market. The information technology (IT) industry is one of the most vibrant in Europe. The agriculture sector, on the other hand, suffers from fragmentation, lack of economic cohesion (economies of scale are hard to achieve on small parcels of land that are owned by people with different interests), and a lack of future perspective.

While EU membership made Romania eligible for economic assistance through the Union's Structural and Cohesion Funds, aimed at reducing regional disparities in terms of income, wealth, and opportunities, the country has been slow to absorb funds made available by the EU for various economic development programs. The allocation and use of such funds has been predicated on an efficient public administration, reliable contract enforcement, and low levels of corruption—areas in which Romania has not demonstrated sufficient capacity.

Along with other European countries, Romania was affected by the late-2000s global financial crisis. In 2009, the country took a two-year, €20 billion loan from the IMF, the EU, and the World Bank as its economy shrank by 6.2%. Romania imposed harsh austerity measures under the agreement, reducing public wages by one-fourth and increasing sales tax by 5.0%. Following the IMF/EU/World Bank bailout, the Romanian economy grew slightly in 2012, with GDP increasing by 0.6%, before rebounding in earnest from 2013 to 2016 on the back of particularly strong industrial export performance and improved domestic consumption. In 2015, GDP increased by 3.7%, one of the highest growth rates in Europe.

In order to assure sustainable long-term growth, Romania is faced with a number of challenges, notably in the realms of improvements to education and poverty reduction. Since 2011, the National Education Law has promoted changes in education, aiming to raise academic achievement for Romania's children up to the level found in most EU countries. In March 2015, the World Bank approved the Romania Secondary Education Project, a $243 million initiative to help further improvements to the Romanian education system. Other major challenges for Romania's economic development are the reduction of poverty and the creation of a broader middle class. Although Romania's per capita GDP—$20,600 as of 2015—places it in the top 40.0% for per capita GDP globally, wealth distribution is profoundly unequal. In 2011, an estimated 22.4% of Romanians were living in poverty. In addition, according to the World Bank, in 2016, Romania's rural poverty rate was more than 70.0%, the highest in all the EU, reflecting one of Europe's largest gaps in living standards between urban and rural areas.

A social insurance system has been in place since 1912. Social security covers most wage earners, and a voluntary system is in place for persons wishing additional coverage. Old-age pensions are granted at age 65 for men and at age 60 for women. Those engaged in hazardous or arduous work are eligible for retirement earlier. The program is funded by contributions from employers and employees, with deficits covered by the government. Workers who do not meet the conditions of duration of employment at retirement age are provided with social assistance. Survivors' benefits are payable to the spouse, fathers and mothers, brothers and sisters who are dependents of the deceased, and children up to age 16. Workers' compensation and unemployment insurance are also provided, as well as maternity benefits and family allowances. In the 21st century, a number of private Romanian and foreign companies have supplemented the traditional state insurance market.

All residents are entitled to medical care, although human rights organizations reported that representatives of certain groups (Roma, prisoners, and persons with HIV/AIDS) may be illegally denied or provided inadequate medical care. Families with children under age 16 receive family allowances and a birth grant for each child. In addition to state social insurance, other schemes cover members of artisans' cooperatives, the clergy, and the professions.

The constitution guarantees equal pay for equal work, but women are still concentrated in low-paying professions. As of the 2008 parliamentary election, only 38 of the 334 members of the Chamber of Deputies (11.4%) and only 8 of the 137 members of the Senate (5.8%) were women. Few women are in senior management positions in the private sector. Women also face considerable employment discrimination in Romania's harsh economic climate and suffer from a higher rate of unemployment than do men. Violence against women, including rape, is a serious problem. It is difficult to bring rape cases to trial because the victim's testimony is not considered sufficient evidence; medical evidence and witnesses are required. Domestic abuse is widespread. In 2010, public awareness of sexual harassment remained low, and no effective programs existed to educate the public about it.

Ethnic Hungarians are the largest minority and are subject to discrimination. The Roma population continues to be harassed, and there are reports of anti-Semitic activity. Human rights are generally respected, although there were continued reports of the mistreatment of detainees. The government has improved prison conditions and instituted vocational training, but prisons are still overcrowded, and the conditions remain poor. Human rights organizations also reported incidences of verbal abuse and occasionally violence, including by the authorities, based on sexual orientation and gender identity.

As part of a broader social and economic transition, Romania's healthcare system underwent major reforms in the 1990s as it was transformed from a centralized, tax-based system to a pluralistic one based on contractual relationships between healthcare providers and insurance funds. Total healthcare expenditure was estimated at 5.3% of GDP in 2013. There were an estimated 24 physicians and 56 nurses and midwives per 10,000 people.

According to the CIA, life expectancy in Romania was 74.9 years in 2015. The fertility rate was 1.3 children born per woman, while the infant mortality rate was 9.9 per 1,000 live births. The maternal mortality rate was 31 per 100,000 births. In 2014, it was estimated that 89.0% of children were vaccinated against measles; 94.0% were immunized against diphtheria, pertussis, and tetanus. All the country's inhabitants had access to safe drinking water in 2015; 79.1% had access to improved sanitation facilities.

The prevalence of HIV/AIDS among adults was 0.1% in 2013. In 2014, the incidence of tuberculosis was 81 cases per 100,000 people and was disproportionately high among the prison population. In 2009, Romania's representative in the World Health Organization reported that, after a successfully implemented control program, the proportion of prisoners with tuberculosis had fallen to 2.0%.

Inadequate housing has been a serious problem since World War II. Romanian housing suffered from the 1940 earthquake, war damage, neglect, and inadequate repair and maintenance after the war. An increase in the urban population caused by industrialization and emphasis on capital construction exacerbated the problem. Since 1965, the government has encouraged private construction by state support in the form of credits and expertise. However, an uncertain economy means that maintenance for existing properties has been somewhat poor.

In 1999, the total housing stock was at about 7.9 million units. At the 2011 census, there were 7.5 million dwellings serving 8.7 million households (20.1 million people). The Statistical Office for the EU (Eurostat) reported in 2014 that 60.5% of all dwellings were single-family detached houses and that 96.6% of all units were owner-occupied—the highest rate in the EU.

Between 2002 and 2007, as Romania prepared to join the EU, the Romanian housing market experienced a dramatic increase in property prices by a factor of 10. In 2007, the year of EU accession, property prices jumped by 20.0%. A year later, Romania experienced a sharp decline in the housing construction sector during the 2008 economic crisis. As a result, Romania has an unusually high housing-price-to-income ratio. In 2014, Eurostat reported the housing cost overburden in Romania to exceed 14.0%, which was an increase over the 2011–12 period. Eurostat also reported a high rate of overcrowding in Romania (56.1%), as well as a high rate of sanitary problems, with 36.2% of Romanians lacking bathing facilities and 37.0% lacking an indoor flushing toilet.

Overall, the United Nations Educational, Scientific, and Cultural Organization (UNESCO) estimated that Romania had a literacy rate of 98.8% in 2015.

Education is compulsory for students between the ages of 6 and 15. The general course of study includes four years of primary school followed by four years of lower secondary school. Students may attend art or trade school after their primary education is complete. At the upper secondary level, students may choose between schools offering general studies, vocational programs, or technical studies. Upper-secondary programs generally last from three to four years. The academic year runs from September to June.

According to UNESCO, 97.0% of age-eligible children in Romania were enrolled in primary school in 2012, up from 94.0% in 2005. In 2012 secondary enrollment for age-eligible children stood at 86.8% and tertiary enrollment was estimated at 52.5%. Tertiary enrollment rates were 58.0% among females and 46.7% among males.

Over 92.0% of all students complete their primary education. The student-to-teacher ratio for primary school was about 18:1 in 2013; the ratio for secondary school was about 13:1. As of 2012, public expenditure on education was estimated at 3.0% of GDP, down from 3.4% in 2003.

Admission to an advanced institution depends on a variety of factors, including the student's social background. Over half the students receive government assistance. Yearly quotas are established by the Ministry of Education according to manpower needs. Students in some fields must first complete six months of practical work in industry or agriculture.

Like other formerly Communist countries, Romania has emphasized polytechnic education in the 21st century. This link of education with life in the early grades means studying practical subjects; however, beginning in the upper grades, there are work programs, often directly in enterprises, in workshops, or on collective farms, depending on the locality.

Romania's leading universities are those in Bucharest (founded in 1864), Braşov (1971), Craiova (1966), Galati (1948), Iaşi (1860), Timişoara (1962), and the Babes–Bolyai University in Cluj-Napoca. The latter is the product of the 1959 merger of the Romanian Victor Babes University (founded 1919) and the János Bolyai University (1945) for Hungarian minority students, whose goal was to strengthen socialist patriotism.

The National Library and the Romanian Academy Library, both in Bucharest, had a total collection of 9 million volumes in 2012, according to the Online Computer Library Center (OCLC). The Romanian Academy Library has a collection mainly on the history and culture of the Romanian people. Other large public libraries are the university libraries at Bucharest, Iaşi, and Cluj-Napoca. The OCLC reported that there were 2,943 public libraries holding 16.8 million volumes in 2008.

Romania had some 649 museums in 2013, according to the OCLC. Bucharest is home to many of the most important museums, including the National History Museum of Romania, the National Museum of Art, and the newer Historical Museum of Bucharest (founded in 1970) and Cotroceni National Museum (1991), featuring Romanian fine art, architecture, and decorative art. Also in the capital are the Cecilia and Frederick Storck Museum, highlighting the works of Karl Storck, a great Romanian sculptor, and his family, also prominent artists; the Curteo Veche Museum, featuring archaeological exhibits and Page 637  |  Top of Articlehoused in a 15th-century palace; and the Museum of Romanian Literature.

Romania's telecommunications network is experiencing rapid growth in both the domestic and international sectors. Growth in wireless telephony has been especially significant. Domestic service is provided by fixed-line and wireless systems. Since the implementation of liberalization in 2003, the number of fixed lines in use has grown by 20%, with connections to 21% of all households. Wireless is growing even faster. There are four major service providers. International service is provided by 10 satellite ground stations, while there are digital, international, and direct-dial exchanges operating in Bucharest.

The CIA reported that in 2014 there were 4.6 million telephone landlines in Romania. In addition to landlines, there were 22.9 million mobile phone subscriptions, or an average of 105 per 100 people.

As of 2011, the state-owned Romanian Public Television, commonly known as TVR, controlled six national stations along with six regional studios in Bucharest, Cluj-Napoca, Iaşi, Timişoara, Craiova, and Târgu Mureş. Radio Romania, the state-owned public radio broadcaster, operates four national networks and regional and local stations, as well as an international service. There are multiple privately owned commercial stations in both television and radio. The most popular privately owned television stations are PRO TV and Antena 1. A 1995 report indicated that there were 48 television stations. In 2008, the number had risen to 100. According to the CIA, in 2014, there were 7 public and 187 private television stations using terrestrial broadcasting, in addition to 11 public and 86 private television stations broadcast via satellite. There were 20 public and 502 private radio stations being broadcast terrestrially, in addition to 4 public and 26 private radio stations broadcast via satellite.

In 2012, the country had 2.7 million Internet hosts. In 2014, there were some 11.2 million Internet users in Romania, an average of 51.7 for every 100 residents.

The leading daily newspapers (with 2010 circulation figures) are the tabloids Click (236,000) and Libertatea (Liberty, 150,000), Adevarul (Truth, 130,000), Romania Libera (Free Romania, 45,000), and Evenimentul Zilei (Events of the Day, 150,000).

Though the constitution provides for freedom of expression and prohibits censorship, it is illegal to defame the country. Insulting the state insignia (the coat of arms, national flag, or national anthem) is an offense punishable by imprisonment. In 2010, there were no prosecutions or convictions under this statute. Journalists are generally free to criticize the government, including at senior levels. There have been isolated instances when authorities intimidated or censored the press or verbally attacked journalists.

Economic organizations concerned with Romania's internal and external economic activities include the Romanian Chamber of Commerce and Industry. In 1992, the Council for National Minority Affairs was formed to discuss minority issues. The organization helps the government formulate policies favorable to the minorities of the country. The body is headed by the Secretary General of the government. Representatives from 16 officially recognized minority groups and 12 government ministries make up the organization.

There are also many cooperatives in key sectors of the economy. Many Romanian farmers belong to the private Farmers' Federation. There are about 4,000 farming cooperatives and 41 district unions. A large cooperative located in the manufacturing and consumer sectors of the economy is the Central Union of Commerce and Credit Cooperative. There are over 2,500 production and 850 credit cooperatives. Another important cooperative is the Central Union of Handicraft Cooperatives. The National Union of the Consumers' Cooperatives is based in Bucharest. There is also an active Association for the Protection of Consumers.

The Romanian Academy was founded in 1866 to promote public interest, education, and research in scientific fields. Several professional associations also promote research and public education in specific fields, such as the Romanian Medical Association.

Serving a specific cultural niche, the Transylvania Society of Dracula, based in Bucharest, promotes the study of the Bram Stoker novel Dracula (1897) and the life of Prince Vlad Dracula, on whom the book is loosely based. It has an American and a Canadian chapter.

National youth organizations include the UN Youth Association of Romania, League of Students, National Union of Independent Students of Romania, Junior Chamber, National Scout Organization of Romania, and YMCA/YWCA. There are several sports associations representing a variety of pastimes, such as tennis, skating, track and field, baseball and softball, and badminton.

Civitas Foundation for the Civil Society, established in 1992, sponsors community development and social programs promoting an open, democratic society. Other social action groups include the League for the Defense of Human Rights in Romania and the Women's Association of Romania. There are national chapters of the Red Cross, United Nations Children's Fund (UNICEF), and Habitat for Humanity.

The Carpathian Mountains, the Black Sea coast, and the Danube region were developed to attract large numbers of tourists. Major attractions include many old cities and towns (Braşov, Constanţa, Sibiu, Sighisoara, Suceava, Timişoara, and others) and more than 120 health resorts and spas. The monasteries in Bukovina are famous for their exterior frescoes. Castle Dracula, the castle of Prince Vlad of Walachia, has been a tourist attraction since the 1970s.

The Compendium of Tourism Statistics, published electronically by the UN World Tourism Organization, reported 8.0 million incoming tourists to Romania in 2013, who spent a total of $1.9 billion. Some 7.6 million tourists were from Europe.

A valid passport is required to enter Romania of all foreign nationals except those of the countries of the EU, who only need an identity card. Citizens of the United States, Canada, and most European countries do not need a visa for stays of up to 90 days.

Popular sports are football (soccer), skiing, hiking, swimming, canoeing, wrestling, handball, and gymnastics. Between 1965 and 2012, Romanian athletes won 300 Olympic medals (88 gold, 93 silver, and 119 bronze). Romania was the only Page 638  |  Top of ArticleSocialist country to send athletes to the 1984 games in Los Angeles; all the others, following the USSR's lead, boycotted these games.

Perhaps the most famous historical figure in Romania was Vlad III (1431–76), a prince of Walachia also known as Dracula (“son of the dragon”) in honor of his father's induction to the Catholic Order of the Dragon. He resisted the Turkish invasion, earning the name Tepes (“the impaler”) because of his practice of impaling his enemies on stakes. Vlad was made into a vampire by Irish author Bram Stoker in his novel Dracula (1897). The first leader of Communist Romania was Gheorghe GheorghiuDej (1901–65), who held the office of premier from 1952 to 1955 and of president of the State Council from 1961 until his death. Nicolae Ceauşescu (1918–89) was general secretary of the Communist Party between 1965 and 1989 and head of state from 1967 to 1989; his wife, Elena (1919–89), was a member of the Permanent Bureau of the Executive Committee of the Communist Party.

Ion Heliade-Radulescu (1802–72) founded the Bucharest Conservatory and the National Theater and became first president of the Romanian Academy. Mihail Kogalniceanu (1817–91), a leading statesman in the early Romanian monarchy, inaugurated modern Romanian historiography. Vasile Alecsandri (1821–90) was a leader of the traditionalist school of writers, which sought its inspiration in the Romanian past rather than in imitations of foreign writers. Mihail Eminescu (1850–89) is regarded as an outstanding poet, famous for romantic lyricism. His friend Ion Creanga (1837–87) drew from folklore and wrote with a gaiety and gusto recalling French author François Rabelais. The nation's greatest playwright was Ion Luca Caragiale (1852–1912), who excelled in social comedy. An internationally famous Romanian-born playwright, Eugène Ionesco (1912–94), settled in Paris in 1938. Mihail Sadoveanu (1880–1961) was an important novelist in the period between the two world wars. Romanian-born Elie Wiesel (b. 1928), in the United States from 1956, is a writer on Jewish subjects, especially the Holocaust, and a winner of the Nobel Peace Prize in 1986. The Romanian-born German novelist Herta Mueller (b. 1953) was awarded the 2009 Nobel Prize in Literature. Romanian-born Mircea Eliade (1907–86) was a scholar in comparative religion and comparative mythology and lived in the United States from 1958. Romanian-born Tristan Tzara (1896–1963), a literary and artistic critic who settled in Paris, was one of the founders of Dadaism. Nicolae Grigorescu (1838–1907) and Ion Andreescu (1850–82) were leading painters, as was Theodor Aman (1831–91), a modern artist and founder of the School of Fine Arts in Bucharest. Saul Steinberg (1914–99) was a cartoonist and illustrator, best known for his work for New Yorker magazine; he immigrated to the United States in 1942. Sculpture was greatly advanced by Constantin Brâncuşi (1876–1957). Perhaps the greatest names Romania has given to the musical world are those of the violinist and composer Georges Enescu (1881–1955), known for his Romanian Rhapsodies (1901–02), and the pianist Dinu Lipatti (1917–50). A prominent tennis player is Ilie Nastase (b. 1946). Gymnast Nadia Comaneci (b. 1961) won three gold medals at the 1976 Olympics and two gold medals at the 1980 games.

Romania has no territories or colonies.