December 20th 2005, 19:13. Sebastian Vlădescu, the then financeminister, announces the result of the biggest privatisation inRomanian history: Austrian group Erste bought the biggest localbank BCR beating Portugal's Millennium BCP by a whisker, in atransaction worth 3.75 billion euros. For both groups BCR is "thedeal of a lifetime", but an operation that required significantresources, even above their normal powers, considering that thedifference between Austria and Portugal versus Romania is not thatgreat in terms of size of the economy.
What would have happened to the BCR had the Portuguese been thewinners of the privatisation auction? Would BCR not have been onthe ropes had its main shareholder not been able to support it anymore? Who would have "rescued" whom now - Millennium BCR or BCRMillennium? Erste itself worked its way through the crisis with thehelp of the Austrian state, which injected 1.2 billion euros in itin early 2009 and guaranteed bonds issued by the bank. The vastmajority of the international financial groups that own banks inRomania were "rescued" during the crisis by their own states, whopumped billions of euros into them to keep them from being engulfedin the whirlwind of the crisis. The Greek and the Portuguese atMillennium, who after losing BCR decided to invest over 300 millioneuros to start greenfield projects, now hold 16%-17% of the assetsof the Romanian banking system, with problems in their owncountries making it much more difficult to fund Romanian operationsthrough loans.
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