The analysts of financial giant Credit Suisse First Boston (CSFB) do not believe the Nastase Cabinet will be able to conclude talks with the EU by the general elections.
"Even with a strong push, however, it is not realistic for the government to close all chapter negotiations before October 2004, in our view," the CSFB analysts say in their latest report on Romania.
They also feel that the difficulty of closing eight chapters (most of which are difficult chapters in their own right) in 7-8 months could be exacerbated by the fact that the Romanian government could find it hard to focus on the negotiations in an election year.
"We do believe that Romania can complete all chapter negotiations in the next twelve months (i.e. by spring 2005), in which case the target EU entry date of 2007 remains credible," the report estimates.
The document also says that if the Romanian government cannot complete the chapter negotiations before October 2004 but delays the completion until spring 2005, this will not jeopardise the 2007 target entry date. "But the government has to receive the 'fully functional market economy' status from the EU in this year's progress report in order for the target to remain credible," CSFB analysts explain.
Romania has so far provisionally closed 22 out of a total of 30 chapters with the EU, compared to 26 for Bulgaria. Bulgaria's head start is explained by the fact that it began preparing the position documents used in chapter negotiations long before Romania.
CSFB feels there is a high likelihood that the government will close the chapters on free movement of services and energy by the middle of this year. The remaining chapters on competition, agriculture, regional policy, environment, justice and home affairs, financial and budgetary provisions, will all be tough to complete. Compared to the ten first wave countries at the same state in their accession process, Romania and Bulgaria are doing very well.
According to the report, the potential absorption problems related to the upcoming first-wave EU enlargement and the ongoing intra-EU debates on migration issues and the EU constitution will possibly make the EU accession process harder for both Bulgaria and Romania, but more so for Romania, as it is a larger country with more substantial repercussions for the EU.
CSFB also feels that a new IMF agreement will help Romania get the 'fully functional market economy' status in the European Commission's progress report due out in October this year and boost Bucharest's credibility in Brussels.
razvan.voican@zf.ro
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