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Romania, located in SE Central Europe, north of the Balkan Peninsula, is an emerging European democracy. Romania's neighbors are: the Republic of Moldavia, the Ukraine, Bulgaria, the former Yugoslavia and Hungary, while in the south-east it borders on the Black Sea. The country lies midway between the Atlantic coast and the Urals, between the Equator and the North Pole.

The climate is mild, temperate-continental, with mean temperatures of -3° C in winter and 22-24° C in summer.

Nature has been generous with Romania: its relief is harmoniously distributed, with the mountains, hills and plains each covering about one-third of the country's area. Forests still cover 28% of the area, and the fauna is one of the richest and most varied in Europe. The Danube Delta, a UNESCO protected biosphere reservation, is unique in Europe. The Carpathian Mountains, the Lower Danube (1,075 km), the Black Sea Coast (234 km), have influenced in the course of history the life of both the Romanians' ancestors (the Indo-European Geto-Dacians who had populated this space as early as the 2nd millennium BC and the victorious Romans of the 2nd-3rd centuries AD) and of the Romanian people, born, like other Romanic peoples - the French, the Spanish, the Italians - during the 1st millennium AD.

Orthodox Christians, the Romanian lived from the Middle Ages to the modern times in three neighboring self-dependent principalities - Walachia, Moldavia and Transylvania - which preserved their state entity, faith and civilization, despite the expansionist tendencies of the big neighboring powers - the Hungarian and Polish kingdoms, the Ottoman Empire, later Russia and the Habsburg Empire.

The Romanian nation-state was born in 1859, by the union of Walachia and Moldavia, and in 1918, at the end of World War I, all the territories inhabited by the Romanians united and formed Greater Romania. After World War II, together with the other Central and East European states, Romania came into the Soviet Union's sphere of influence and experienced the harshness and constraints of the communist régime.

December 1989 opened a new page in Romania's history, paving the way for the restoration of democracy and a market economy.

With an area of 238,391 square kilometers (91,780 square miles) and a population of 22.6 million (95.3 inh./sq. km), Romania is a medium-size European country. It is slightly smaller in area than Great Britain and its population is smaller than that of Canada, but bigger than the population of Venezuela. At present, Romania is the most densely populated country in SE Europe and the second most densely populated country in Central Europe. More than half of the population (55 %) lives in towns. There are 25 towns in the country whose population exceeds 100,000 inhabitants, and there are 8 cities whose population exceeds 300,000.

The capital of the country, Bucharest, dates from the 15th century. It is situated in the south of Romania and its population counts 2,037,000 inhabitants.

Major Romanian population centres are: Bucharest - capital (2,037,000 inhabitants); Constanta (346,000); Iasi (346,000); Timisoara (332,000); Galati (327,000); Cluj-Napoca (332,000); Brasov (319,000); Craiova (310,000); Ploiesti (253,000), Braila (235,000).

The population of the country is predominantly Romanian. A breakdown of the ethnic structure of the population is: Romanian (89.4%); Hungarian (7.1%); German (0.5%); Others (3.0%)

The percentage of people belonging to the major religious denominations is the following: Orthodox (86.8%); Roman-Catholic (5.0%); Reformed (3.5%); Greek-Catholic (1.0%);

From an administrative point of view, Romania is divided into 41 counties, while Bucharest, the capital, is also a separate administrative unit with a county status. There are 262 towns and 2,686 communes in the country. The major ports are: Constanta, Mangalia and Sulina on the Black Sea, Tulcea, Galati, Braila, Giurgiu and Drobeta-Turnu Severin on the Danube. After the opening of the Rhine-Main-Danube Canal in 1992, the Danube-Black Sea Canal provides direct connection between the Black Sea and the North Sea. Bucharest-Otopeni and Bucharest-Baneasa are the main airports of the capital; other 16 towns are connected to the capital by regular flights. Standard time is East European Time (GMT + 2 hours), and between March and September - Daylight Saving Time (GMT + 2 hours during Official Summer Time).

The metric system has been in force since 1866.

The official language is Romanian, the easternmost representative of the family of Romance languages. It derives from the Latin spoken in the Roman provinces of Dacia and Moesia in ancient times.

The Romanians are quite good at learning foreign languages, therefore English, French and German are also widely spoken.

The Constitution, voted by Parliament on November 21, 1991 and validated by a referendum on December 8, 1991, proclaims Romania a parliamentary democracy. The two houses of the Parliament (the Chamber of Deputies and the Senate) are elected by universal vote for a four-year term. The President, also elected by universal vote for a four-year term (with the right to be re-elected only once), is the Supreme Commander of the Armed Forces and Chairman of the Supreme Defense Council. He nominates a candidate for the office of Prime-Minister, while the Cabinet members have to be endorsed by the Parliament's confidence vote.

Public administration in the territorial administrative units is grounded on the principles of local autonomy and decentralization of public services. Local councils (at the level of counties, towns and villages) and mayors are elected by direct vote. The Government appoints a prefect at the head of each county.

The judicial authority comprises the law courts, the Public Ministry and the Higher Council of Magistracy.

Romania is rich in natural resources: oil (in 1938 it was the second biggest producer in Europe and the seventh in the world), methane gas (the fifth biggest world producer in 1975), coal, nonferrous ores, gold, silver, salt etc. Farmland accounts for 40% of the country's territory, while forests represent 28% and pastures and hayfields 20%.

The major industrial branches are machine-building, food industry, metallurgy, chemistry, light industry, wood processing.

Romanian agriculture produces mainly cereals (wheat, maize), sunflower, sugar beet, potatoes, grapes.

Livestock is represented by cattle, pigs, sheep and goats.

Transport: the country's railway network totals 11,374 km of which 3,866 km electrified track. The public road network totals 72,828 km of which 17,248 modernized roads. There is an active sea, river-borne and air traffic. The Bucharest Underground is constantly extending its network.

The evolution of the major macroeconomic indices as well as the production levels in industry and agriculture are presented in Appendices 1 and 2.

Prior to December 1989, the economy was based on socialist (state and co-operative) ownership, as private ownership was practically not allowed and it was characterized by excessive centralization and rigid planning. In 1990 a strategy of transition was adopted, which combined a carefully paced reform process in state enterprises (by turning them into autonomous administrations - régies autonomous and commercial companies) with a phased approach to price liberalization, in a steady effort to keep inflationary pressures under control and to stop the decline in production and the displacement of labour, as well as to ease the attendant social costs. In this respect, measures were adopted aimed at dismantling the command economy, passing the privatization law, encouraging foreign investment etc.

Privatization legislation passed since 1991 provides for the transfer of most state enterprises to the private sector. Certificates of ownership were issued to all eligible Romanian citizens and can be exchanged for either shares in a Romanian company or units in one of the five Private Ownership Funds.

Pursuant to Law 55/1995, the Mass Privatization Program has been launched. This program includes over 3,000 enterprises with majority state-owned capital. Over December 1992 - February 1996, 1,553 companies were privatized, with a nominal capital worth 3,988 billion lei and 591,062 employees.

The private sector's contribution to GDP was estimated at 45% at the end of 1995, up from 16% in 1990, 26% in 1992, 32% in 1993 and 39% in 1995. Structure of economic operators (1995): 84 régies autonomous of national interest, 399 régies autonomous of local interest, 13,076 commercial companies with mostly state capital, 466,438 private capital commercial companies, and 226,407 family associations.

In 1995 the volume of foreign trade was of 7,492 million USD for exports and 8,685 million USD for imports in FOB prices. Private companies accounted for about 30% of all foreign trade operations.