The analysts of US-based investment bank Bear Stearns have recently modified their outlook on Romania from "positive" to "negative", due to numerous negative news and warnings issued by Brussels about Bucharest's capability to close the negotiation chapters with the European Union.
This is the first signal from the foreign markets about a change in perception induced by the more and more visible difficulties Romania is having in completing the accession negotiations by the end of this year, so that it could join the EU in 2007 side by side with Bulgaria. Other than that, the markets do not seem to have lent an ear to the aggressive comments coming from the European Parliament and going as far as to threaten suspension of negotiations with Romania unless it makes substantial progress in the judiciary reform, in fighting corruption and international adoptions. The yields of the Romanian eurobonds have not seen visible fluctuations generated by possible investor reactions to the negative accession news, which suggests they still trust the schedule agreed with the EU will be kept. The international rating agencies did not change their evaluations of Romania, either, at least for the time being.
Fitch maintains its stable rating outlook, as does Moody's, while Standard & Poor's points to a positive outlook, with its analysts due in Bucharest this month.
The change of perception in Bear Stearns' case comes after a positive opinion of the American bank in the last few years, during which it felt the Romanian securities traded on the international capital market would deserve the same good price as those of the Bulgarian ones, even though the latter are backed by an up to two step higher country rating.
During its first transaction on the Romanian market, Bear Stearns has recently won along with Raiffeisen Bank Austria the contract to finance the first two years of construction works on the Brasov-Bors motorway with some 250 million euros.
The bank's analysts are now considering the possible reluctance of the Government in adopting some unpalatable reform measures right before the elections, feeling the Romanian authorities are counting on the possibility to procrastinate closure of the negotiation chapters for early 2005, that is until after the general elections.
The sure thing is that, unless clear reform steps in the fields highlighted by the EU are taken, the Romanian authorities will not be able to put an end to all those negativistic comments on the accession chances. This is why Bear Stearns analysts estimate Romania will not be able to get any rating upgrades until 2005, when light is shed on the accession process status.
razvan.voican@zf.ro
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