THE ASSETS OF THE STATE TO BE LISTED ON THE STOCK MARKET The government brings back the project of the Romanian Investment Fund

• The revamped anti-crisis program of the Boc government brings back the project to create a sovereign investment fund, which was presented by the BURSA newspaper six months ago

New anti-crisis measures will be included by the Government in a project intended to relaunch the economic activity, in particular for the creation of new jobs.

One of the important points is the set up is the set up of an investment fund which will include all the minority stakes of the state in various countries, which are now managed by individual ministries. The project for the creation of such a "sovereign fund" isn"t new, it has already been proposed by Mircea Ursache, the former head of the AVAS (the Authority for State Assets Recovery), who submitted it to the government on September 4th, 2009, but by October, when he was replaced, he had yet to receive an answer from his colleagues in the Government, who were supposed to approve the project, and then send it to the Parliament for approval.

The political crisis which began in October caused the project to be put on hold, but yesterday, during the government"s meeting, it was showed up included again in the anti-crisis package of the Boc Government, but in a revised form.

In its first draft, which can be viewed on www.bursa.ro, the plan was for the Government to come up with all the stakes it still holds in various companies, CEC Bank would provide the operating funds, and the share capital to come from the foreign currency reserves of the NBR.

This way, the fund could have raised several billion Euros. A more precise amount could have only been determined after the evaluation of the investments that the portfolio of the new fund would include.

The advantage of such a fund would be that, unlike ministries, it could enter and exit ventures more quickly, and the influence of politics on such decisions could be significantly reduced.

In other words, it would be more flexible and quicker in seizing opportunities, as opposed to the clumsy and slow response mechanism of government agencies and ministries.

In Europe, the quick growth of the sovereign fund industry in the last decade (even though they"ve been around since the 50s) has generated numerous debates on the advantages and drawbacks of such funds.

The European Commission last year notified a common European approach when it comes to the sovereign fund sector.

Also in the initial version, the sovereign fund was supposed to include all of the holdings of the state, instead of just its minority stakes. It is possible that the Government would now encapsulate in a single project both alternatives discussed last year: the creation of a new SIF, as well as that of a sovereign fund.

Mircea Ursache, the initiator of the project, last year said for "Bursa" that using such a fund, it would be the first time when the holdings of the state would be sold exclusively on the stock market, in a transparent manner.