Romania's Parliament passed, on June 10, a law that freezes the sale of stakes in state-owned companies for two years.

If eventually enforced, the bill will complicate the listing of energy producer Hidroelectrica, the most valuable state company.

The bill, initiated by the Social Democratic Party (PSD), passed with 199 votes in favor, 89 against and 3 abstentions, G4media.ro reported. The vice-president of the ruling Liberal Party (PNL), Florin Roman, announced that the Liberals would challenge the law at the Constitutional Court.

Investors and analysts had previously criticized the draft bill for its significant adverse effects. The Bucharest Stock Exchange (BVB), in a press release after the vote in Parliament, argued against such regulation highlighting the positive impact of the IPOs at state-controlled companies over the past 15 years. Listing a company's shares is different from privatizing it, BVB argues. The sale of minority shares would not necessarily terminate the state's control over the company.

The Social Democratic Party (PSD), the most significant opposition force in Romania - which currently has a majority in the Parliament, argued that the bill aimed to "protect national interests in the economic sector."

editor@romania-insider.com

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