Answering your questions

“Should I be worried watching RON going down?”
Jonathan L., Manchester
– Once a mother had 2 daughters. One of them got married to a farmer, who wanted most of the times rain, so as to have sufficient water for his crops. The other one got married to a worker who was building roofs, he needed sunshine so as to be able to work and finish fast his work. So, the poor mother did not know what to pray for: Rain or sun?
I know that a strong RON and a weak EURO are better for the poor workers and many parts of the society, in our case the Romanian society. But in the same time the economy loses rhythm, because the strong RON squeezes the exports, while it encourages the imports. We saw the results last year, with the Romanian trade deficit climbing to a new historical record, around – 20.000.000.000 euros! This brought also strong inflation, much higher than all predictions (in January it rose up to 7,26%!)
In my opinion, the policy of weak RON is the best for Romania today. Exports, production, attraction of Foreign Direct Investments and real estate market will benefit from this, together with almost all the healthy parts of the economy. In long term, Romania will achieve much more with a weak RON, than with a strong one. For us, the investors, it is obvious that we want a weak currency, so as our money (euros or pounds) to have more value and also to invest in an economy that rises faster and with a steady pace.
Ziarul Financiar newspaper had a very interesting article about this:
http://www.zf.ro/articol_160949/isarescu__the_euro_will_stay_high_this_year.html
“As a foreign businessman is it difficult to do business in Romania?”
Gregory F., New York
– It is really simple to do business in Romania. The business environment is “investors friendly” and the most important factor is how serious you are as a businessman. I have met hundreds of foreigners doing business here. Most of them do not have a clear strategy and opinion for what they want to do. I also see many people trying to do business forgetting the basic rules they follow in their own countries: Lawyers, accountants and other serious people are vital for any business. When I see “businessmen” avoiding using their services, then how can these “businessmen” complain for difficult problems in Romania?

“I read in the news about Mercedes and other big companies that they will invest in new factories in Romania. Why here and not other Eastern European countries?
Bogdan N., Cluj
– Well, Bogdan, there are really many reasons. Some of them could be:

• The strategic location of Romania in Southeastern Europe. From here you can “control” the southern part of the Balkans, the western too, but also other countries in the East (such as Ukraine) and in the central Europe.
• The salaries are much lower comparing to other countries in central Europe and in some cases even comparing eastern countries. Let us not forget that in countries like Slovakia, when the big car manufacturers entered, in 3 – 5 years the salaries of the expert technicians were over doubled.
• The legislation here is very flexible, allowing to foreign investments to move fast (for example, the time for an authorisation for a factory here is the one quarter of the time which is needed at my country, Greece). Ok, it is not perfect, but please show me a country of European Union where all things work 100% right.
• The infrastructure here is much better than most of the countries in the region.
• Romanians are known as workers with good experience and expertise (please do not ask me if I agree with this opinion, I come from different domain).
• The government and most of the local authorities really try hard to help major companies to invest here.

“Couple of days ago, you wrote about the South. Shall I invest my money on a super land they proposed to me in Frumusani zone? The price is 75 euros / sq.m. and I have all facilities”
Cristian J., Lyon
– Well, it depends. Desperate people can do anything nowadays. The prices in the location you have mentioned vary between 20 and 50 euros / sq.m. and I am referring to the ASKED prices. Please re-negotiate the price they offer you, or try to find something else there, because I am sure that there is a lot of “air” in the middle between the real price of the owner and the price some people ask you to pay.

“I am a typical Romanian of the middle class. Here for an average person the prices for an apartment or a house are very high, but people tell us that, compared with other countries in Europe, the prices in Romania  are still not so high. How much, in percent, do you think that the prices will increase?”
Magda I., Bucharest
– Although noone can… smell his fingers and be very precise, as I have explained to one of my interviews, this year the prices of properties (and especially apartments) will stop growing in the same direction. As I have answered to an interview last month (http://http://www.iliaspapageorgiadis.ro/en/?p=35) this year we will have 3 categories of properties: The ones which will stop growing, the ones which will grow from 10 – 30% and the ones which will continue to grow a lot this year, from 30 – 100%.
The properties that I expect to have the stronger pace of increase are the ones which are addressed to the majority of Romanian people. Small lands suitable for a house, small apartments in low and medium areas, generally talking: properties for the masses. I really find it very difficult to believe that the prices of some crazy owners (for example a villa in Eminescu area with 6.000 euros / sq.m.) will be justified, that there will be plenty of transactions in this price range and that after some months the price will be even higher.