The Interview of the Week

(excerpts pertaining to property restitution)

Interviewer: Gabriela Adamesteanu (GA)

Interviewee: Valeriu Stoica (VS), Minister of Justice

GA: All economists blame the current difficult crisis in Romania on the lack of private property guarantees in Romania. Neither the Constitution, nor the property laws defend property rights in Romania.

VS: I agree with the economists. Everything that is happening currently in Romania has originated with the property rights crisis. As long as the property rights issue is not fully resolved, we will suffer economically. Here are the four major unsolved issues that remain to be addressed:

• The restitution of confiscated real estate
  All neighboring former communist countries have solved this problem despite imperfect approaches. Our goal should be finding a solution. My legislative proposal is currently being debated in Parliament. I am not claiming that my solution is perfect, but is better to adopt a flawed proposal rather than none at all, because we need to solve this crisis once and for all rather than putting off addressing the issue. Delaying the restitution of confiscated properties is one reason for our inability to solve the economic crisis in Romania. Why? By not solving the problem of property restitution, we cannot solve the issue of property registration – an essential condition for a well functioning economy.
• The restitution of confiscated land
  This problem is not resolved completely either. As long as it is not being fully addressed, we cannot expect the resolution of our farming problem. This is one of the fundamental conditions that needs to be solved before collateral ones, like technical development, can be even mentioned.
• Privatization
  We have been able to start a true privatization only lately. The prior attempt, which gave ownership vouchers to all Romanian citizens, has been a major lie. Therefore, the voucher-based privatization turned out to be a barrier to our privatization attempt, as it is well known that the voucher owners turned against the privatization of major companies. Only two major privatization attempts have been successful during the past nine years: RomTelecom and Banca Romana pentru Dezvoltare (The Romanian Bank for Development). It is encouraging that we closed two major deals; but they need to be followed by more.

GA: But both those privatization deals are being questioned from the legal point of view…

VS: The legal controversy is less important. If the laws were not obeyed, the guilty should be held responsible. But this interests me less than the two major privation projects accomplished in Romania. And I would be pleased to see Bancorex and Banca Comerciala Romana (The Romanian Commercial Bank), and the banking industry in general, being privatized this year. In addition, it is important to accomplish other important privatization projects either among the self-administered state monopolies (regii autonome) or among the commercial corporations administered by Fondul Proprietatii de Stat (State Property Administration). If the privatization of most state-owned industries had been accomplished immediately after 1990 and 1991, the Romanian economy would not be in crisis today. Unfortunately, the appropriate decisions have not been taken in timely fashion.

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GA: How is the proposal for the restitution law viewed by the Government and the Parliament?

VS: While we have a consensus in the coalition Government regarding the private sector of the economy and the privatization of the state-owned companies, we have divergent opinions regarding the restitution of confiscated real estate and farming land. I thought that we had previously reached an agreement regarding the restitution of confiscated real estate. Our coalition government had voted unanimously in favor of the law for the restitution of all property confiscated abusively by the communist regime, meaning that all parties in the governing coalition were in agreement. I believe though, that the Parliament is blocking the legislation. I hope that during the current parliamentary recess, negotiations among the leaders of the coalition members will lead to the introduction of the restitution law and the renter protection law for debate in the Parliament. It will be a step towards the resolution of the property issue, if both these laws are adopted at the beginning of the next parliamentary session.

GA: I’ll remind you of a particular situation noted by many of our readers; it is regarding the status of the owners whose houses were confiscated and then demolished by the communist regime. My understanding is that there is no law to address their situation, and that the legal ways of recovering their property or obtaining financial compensation for their loss are unclear.

VS: That’s not correct. The law proposal that was sent to the Parliament for approval addresses the situation of destroyed property. Obviously, with the property gone, one can only offer a compensation for the lost property. According to our proposal, this compensation is not monetary initially -- and this might be the reason for dissatisfaction among this category of property owners --, but rather gives ownership certificates that can be exchanged for stocks in state-owned companies that are being privatized. If after five years, these certificates cannot be sold for a profit, the owner is entitled too cash in the value of the compensation with the government. This arrangement represents much more than the options currently available; and that’s because nothing is available today. My law proposal addresses this problem as well. The fact that this proposal is not satisfactory to everyone is another issue.

GA: Why can’t the government provide another piece of land in exchange for the lost property?

VS: It is difficult because, on one hand the land availability is unknown; and on the other hand, the government needs an accurate registry of real estate ownership to determine the land availability. And there is no such registry of real estate ownership in Romania.

GA: When do you think that your law proposal is going to become law?

VS: The government planned to debate this law by the end of December 1998; and the law proposal has been submitted to the Parliament since the autumn of 1998. It is already being debated in the Parliament. I’m optimistic. I hope that by this coming Spring, my law proposal will be voted by the Parliament into law.

GA: Now, let’s talk about the E. Lovinescu Museum. This is a very special situation. If I am not mistaken, your law proposal gives renters living in confiscated properties the right to continue renting those properties if they are older than a given age.

VS: That is correct, for renters seventy or older.

GA: Across the street from the Law School [in Bucharest], there is an apartment building bearing a sign which identifies it as the place where literary meetings took place under the auspices of the "Sburatorul" Literary Journal. On the first floor, there is an apartment that was owned by the literary critic Eugen Lovinescu who left it to his daughter, Monica Lovinescu [former host of the Radio Free Europe for Romania during the Cold War], upon his death. [The apartment was confiscated by the communist regime and recently was reclaimed in court by Monica Lovinescu.] The lawsuit ended recently, and Mrs. Lovinescu now owns the apartment. She, together with important cultural organizations in Romania like The Writers Guild, The Romanian Academy, The Museum of Romanian Literature, would like to establish a museum dedicated to her father, Eugen Lovinescu, on the premises of that apartment. At this time, that is impossible because a military prosecutor has been renting that apartment since Ecaterina Balacioiu, Mrs. Lovinescu’s mother, was arrested by the communist authorities many years ago. She was not only arrested, but she died while in detention, and was buried in one of the communist mass graves. There are no legal means to prosecute this murder. Those responsible for Ecaterina Balacioiu’s death cannot be punished. No one can prove that this former prosecutor, who moved into the Lovinescu apartment only two to three months after Mrs. Balacioiu’s arrest, is responsible for this crime -- apparently, he was a member of the communist prosecution team that ordered Mrs. Balacioiu’s arrest. That former communist military prosecutor is probably in his seventies. How can you envision the formation of a Lovinescu Museum in the apartment inhabited by this man?

VS: I know this particular situation you are describing. And if I were to focus exclusively on it, my answer would categorically be in favor of evicting the tenants. But principles are not built only on isolated cases. This is the difference between laws and judiciary solutions. The judge who analyzes a specific situation is the only one who can evaluate the appropriate application of a given law. There is a rule that I included in my law proposal. Even though renters older than seventy have the right to continue living in a house, there are provisions to allow for their eviction on condition that they be provided with different living quarters. Such quarters do not have to be an apartment identical to the one they are being evicted from. A single person renting a two thousand square feet apartment should not necessarily be given another two thousand square feet apartment. One person is entitled to two hundred square feet. So, if the tenants are provided with decent housing of two hundred square feet per person, then a legal solution for an apartment exchange is possible. In the particular situation you described, the interested parties, the Ministry of Culture, or the Bucharest City Hall can become involved in finding a new apartment for the tenant [the former prosecutor]. For example, the City Hall can provide a studio or a one-bedroom apartment somewhere else in Bucharest -- it does not have to be on Boulevard Elisabeta [downtown Bucharest]. Our law proposal contains the means for fulfilling concrete objectives. The resolution of each concrete issue depends on the modality the court applies the legal provisions to a specific situation. What really matters is that we anticipated such situations. I do not know how many people will understand that no tenants are immune to eviction, although tenants seventy and older are allowed to continue living in the apartment they are currently renting. Tenants cannot be evicted without being offered alternative housing; however, if the apartment owner provides the renter with different living arrangements, the owner can request the renter to vacate the apartment and move to his new renting place.

Translated by Alexandru C. BAGEAC, MD
Beth Israel Deaconess Medical Center
Harvard Medical School