Lowering developmental discrepancies, strengthening trade, improving shipping times and just-in-time delivery, transforming the port of Constanta into an entry point for Asian goods into Europe, immediate increases in FDI, a more prosperous tourism sector benefiting from Asian tourists, lower transportation costs, and less pollution, all and more await Romania once it becomes part of Schengen, according to the local business community.

The Romanian business sector and representatives of the American, Dutch, French, and German chambers of commerce, reunited in the Coaliția pentru Dezvoltarea României (Coalition for the Development of Romania), renewed their calls for Romania’s awaited accession to the Schengen area during a conference on Thursday, November 17.

Coaliția pentru Dezvoltarea României is a private, non-political initiative that gathers the most representative 20 organizations for the business environment in Romania. It is constructed as a formal collaborative arrangement by its combined membership, all of which have good standing as organizations in Romania, and has as its aim the improvement of the business and economic climate in Romania.

The Coalition has long backed Romania’s accession to the Schengen area, and the panel members strengthened that same position this time as well.

Coordinating the Coalition and also representing the Foreign Investors Council, Daniel Anghel moderated the panel and set the stage for the next speakers. “The only way that Romania can fully benefit from being in the EU is through Schengen,” Anghel said. He also underlined the fact that Romania’s GDP per capita expressed in purchasing power standards (PPS) increased to 72% of the European Union’s average, from 34% in 2004, but that further lowering of discrepancies between Romania and the EU requires that the former be welcomed into the Schengen area. He also pointed out Romania’s growing exports and the fact that 75% of the country’s foreign trade is done within the EU bloc. It is this very trade, Anghel said, that is being affected by delays at Romania’s borders with Hungary and Bulgaria, both EU countries. Finally, he hinted at the possibility that Romania’s Port of Constanta will become a major entry point for Asian goods into Europe, which will attract investments and development for the Constanta and Arad counties.

Ramona Jurubiță, vice-president of the Foreign Investors Council, stressed the fact that EU and NATO membership brought an immediate increase in foreign investments in all Eastern European countries. The share of foreign investments in Romania’s GDP doubled since it became a part of the two organizations, she said, and Schengen membership can again jumpstart the Romanian economy. Being granted membership to Schengen, the FIC vice-president said, would be a sign of trust between Romanian and the other members.

The president of the American Chamber of Commerce in Romania, Ionuț Simion, argued that US investors in Romania fully support the country’s bid for Schengen membership. “They have every interest for goods produced in Romania to arrive to buyers quickly, especially considering the problems that supply chains face today,” Simion said, also noting that if Romania were in Schengen, goods that transit the border into other EU countries by railway would save a full day in traffic. “US investors want Romania in Schengen, and Romanians want to contribute to the Union,” he added.

Also part of the panel was Serge Offers, CFO of ING Romania and president of the Netherlands’ Chamber of Commerce in Romania. He underlined the fact that the Netherlands is one of the largest investors in Romania, with the 170 members of the Dutch chamber of commerce in Romania having committed EUR 4 bln in FDI in the country. Offers made a special point of the fact that there was no vote against Romania’s accession to Schengen in the Dutch parliament. Moreover, unlike some Dutch politicians, the representative said, the Dutch business community supports Romania’s bid for Schengen membership and believes that membership will strengthen positive trends in the Romanian economy, especially benefitting SMEs in the border regions. Offers also stressed the desire of businesses operating in Europe to nearshore, to bring their production capabilities closer to home. Romania, Offers says, could benefit from the current global turmoil in supply chains, especially if it was part of Schengen.

Dragoș Petrescu and Laura Florea, representing Romanian Business Leaders, an association with a special focus on the Romanian hospitality and tourism sectors, argued that “tourism needs movement, and movement needs Schengen.” Speaking on the turnover in Romanian tourism, Petrescu highlighted an increase from RON 22 bln (EUR 4.46 bln) in 2017, to an estimated RON 30 bln (EUR 6 bln) for this year. He also noted that the turnover of the Romanian tourism sector is expected to grow by RON 10 bln (EUR 2 bln) post-accession, benefiting the 322,000 people currently working in the field.

Laura Florea gave a practical example of the range of benefits that Romania would have as part of Schengen. She spoke of the case of the Romanian courier service Fan Courier. The company has between 5 and 10 heavy trucks at Romania’s border with Hungary every day, she said, spending up to 10 hours in customs. If Romania were part of Schengen, Fan Courier would be able to ensure faster deliveries. The company currently has to rely on smaller vans, which do not have to go through checks as thoroughly as larger ones. Without border checks, however, Fan Courier could fully rely on the large trucks, and decrease fuel costs by 25%, lowering pollution while also becoming more competitive.

Călin Ile, vice-president of Confederația Patronală Concordia, an association of businesses, built on the arguments of the previous speaker, saying that almost 40% of the time in traffic by a product shipped from Romania to the EU is spent in customs. He also recounted the unanimous, favorable opinion regarding Romania’s accession to Schengen held by all of Concordia’s partners in Business Europe, a lobby group representing enterprises of all sizes in the European Union and seven non-EU European countries. “They all said Romania should be in Schengen, including our Dutch partners,” Ile added. Speaking on tourism, Ile also noted the total absence of Chinese tourists in Romania, whereas neighboring Hungary benefits from tourism from Asia. Chinese tourists, he said, do not come to Romania when they visit Schengen countries, because they would need an extra visa. If Romania was in the Schengen area, this would open up the country to tourism from China.

Another practical example of how being kept out of the Schengen area impacts Romania was given by Florin Pogonaru, president of the Association of Businessmen in Romania (AOAR). Pogonaru’s argument was for a level playing field for business in the EU. He spoke of how biodegradable packaging producers in Romania are being disadvantaged and prevented from accessing even nearby markets like Greece. Biodegradable packages have a shelf life of 30 days, he said, and each day spent waiting in customs represents lost profit for Romanian producers. The same is true, Pogonaru reminded, of all perishable goods produced in Romania. He also noted that trade with Greece, Bulgaria, and even shipments from Asia to Romania would increase immediately after accession.

Sebastian Metz, general manager and board member of the German-Romanian chamber of commerce (AHK), and François Coste, president of the French chamber of commerce in the country, echoed previous speakers. “These days, we cannot allow friction in Europe. It’s time to stand together,” said the representative of AHK, whose members employ 250,000 people in Romania directly. The French representative, on the other hand, spoke to the importance of Romania’s car industry when it comes to exports, and argued that the country should be a logistical hub for the region.

radu@romania-insider.com

(Photo source: Inquam Photos | Sabin Cirstoveanu)