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Romania
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The
principalities of Wallachia and Moldavia - for centuries
under the suzerainty of the Turkish Ottoman Empire - secured
their autonomy in 1856; they united in 1859 and a few
years later adopted the new name of Romania. The country
gained recognition of its independence in 1878. It joined
the Allied Powers in World War I and acquired new territories
- most notably Transylvania - following the conflict.
In 1940, Romania allied with the Axis powers and participated
in the 1941 German invasion of the USSR. Three years later,
overrun by the Soviets, Romania signed an armistice. The
post-war Soviet occupation led to the formation of a Communist
"people's republic" in 1947 and the abdication
of the king. The decades-long rule of dictator Nicolae
CEAUSESCU, who took power in 1965, and his Securitate
police state became increasingly oppressive and draconian
through the 1980s. CEAUSESCU was overthrown and executed
in late 1989. Former Communists dominated the government
until 1996 when they were swept from power. Romania joined
NATO in 2004 and the EU in 2007.
Romania, which joined the European Union on 1 January
2007, began the transition from Communism in 1989 with
a largely obsolete industrial base and a pattern of output
unsuited to the country's needs. The country emerged in
2000 from a punishing three-year recession thanks to strong
demand in EU export markets. Domestic consumption and
investment have fueled strong GDP growth in recent years,
but have led to large current account imbalances. Romania's
macroeconomic gains have only recently started to spur
creation of a middle class and address Romania's widespread
poverty. Corruption and red tape continue to handicap
its business environment. Inflation rose in 2007-08, driven
in part by strong consumer demand and high wage growth,
rising energy costs, a nation-wide drought affecting food
prices, and a relaxation of fiscal discipline. Romania's
strong GDP growth moderated markedly in the last quarter
of 2008 as the country began to feel the effects of a
global downturn in financial markets and trade, and growth
is expected to be much weaker in 2009. Romania hopes to
adopt the euro by 2014.
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