THE GREEK AUSTERITY PLAN HAS BEEN APPROVED Romanian businesspeople believe in the Greeks

• The Leu gained against the Euro

• The Bucharest Stock Exchange had a positive reaction

Exporters and Romanian businessmen do not think that the austerity program, which was passed yesterday, by the Greek parliament, which stipulates drastic measures that would reduce jobs, pensions and jobs, will affect Romania.

Mihai Ionescu, the secretary general of the National Association of Importers and Exporters of Romania (ANEIR), told us that the reduction of the population's consumption in Greece, due to the austerity measures, will result in the lower imports of consumer goods, or, Romania is not an exporter of consumer goods to Greece. Thus, the exports of our country to Greece will not be affected by the austerity measures, he said.

Cristian Pârvan, secretary general of the Association of Romanian Businesspeople (AOAR) thinks that investments will not be affected by the austerity measures.

He said: "Greek businesspeople are interested in tourism, they are traders, not industrialists. The entire Eurozone is in a difficult position. Investments are in question, due to the expected recession across Europe".

• The leu, going up against the Euro

The national currency gained ground against the Euro, as the NBR posted a reference exchange rate of 4.3477 lei, down 0.52 bani compared to the previous session.

The strengthening of the leu comes as, on a foreign level, the European currency yesterday gained against the dolla, from 1.3197 units to 1.3217 units, as the austerity measures in Greece were announced.

The leu also gained against the US dollar yesterday. The Central Bank posted an official exchange rate of 3.2778 lei/dollar, down 0.53 bani, compared to the previous session.

The leu also gained 0.34 bani against the Swiss Franc, as the NBR announced an official exchange rate of 3.5952 lei.

• Fitch: The possibility of a rating raise for "OTE" is low

Concerns over the evolution of the Greek telecommunications sector and of the rating of the Greek telecommunications group "OTE" (the majority shareholder of "Romtelecom"), if Greece were to enter a disorderly default and potentially leave the Eurozone, have increased, a press release of financial ratings firm "Fitch Ratings", says, according to Agerpres.

The possibility of the raising of the "BB" rating of the "OTE" is low, as long as the group maintains its bonds denominated in Euros and "Deutsche Telekom" stands by its policy of supporting "OTE", if it were to need it. "Deutsche Telekom" owns 40% plus one share of the voting rights of OTE.

Still, in the worst case - the hypothetical event of Greece exiting the Eurozone - "Fitch Ratings" estimates that a nationalization of the telecommunications sector or of "OTE" will not take place. Even though it will remain one of the most powerful corporations in Greece, the company will be faced with a huge burden, tied to its bonds denominated in Euros, following the devaluation of its cashflows denominated in drachmas. "OTE" might be forced to raise its prices domestically, and the company would be placed at disadvantage compared to its Greek competitors, "Wind Hellas" and "Vodafone".

About the rating of "OTE", "Fitch Ratings" warns that the group might face a cash shortage if its debt were to be redenominated, which would probably lead to a downward revision of its ratings to the "C" or "D" category.

In 2011, "Fitch Ratings" downgraded the rating of the "OTE" group from "BBB-" to "BB". The agency emphasizes that any evolution which could result in greater official support for "OTE", could have a positive impact on the company's rating. In spite of all this, it rather unlikely that the rating of "OTE" would return to the "investment grade" category (ed. note: recommended for investment), considering the continuous tension Greece's sovereign rating is subjected to.

"Hellenic Telecommunications Organization" (OTE), the largest telecommunications group in South Eastern Europe, owns 54.01% of "Romtelecom". Its mobile telephony division, "Cosmote", is present on the Romanian market through "Cosmote Romania", a company owned by the "OTE" group, through "Romtelecom" (30% of its shares) and "Cosmote Greece" (70% of the shares).

• The Greek government struggles to cut its drug bill

Greece's continuing high level of spending on medicines is a striking example of the broader problems facing the country as it battles under international pressure to cut public expenditure and rein in the nation's debt, "Financial Times" writes, according to Agerpres.

"There were no controls on spending in the past, the whole system favored consumption", said Antonis Karokis, the director for Merck, the US pharmaceutical group, in Greece. "It was not only supplier-led, but demand-led by doctors and patients".

Last year the Greek state and the private healthcare sector spent 4 billion Euros on medicines alone, amounting to 2.4% of the GDP - the highest proportion in any industrialized country and more than twice that in the UK. Greece spends more per capita on drugs than any nation aside from the US and Canada.

The number of drug wholesalers, doctors and pharmacists per capita is among the highest in the OECD group of countries (ed. note: Organization for Economic Co-operation and Development), each with incentives to encourage medicine use.

Corruption remains widespread, according to doctors, pharmacists and medical suppliers, with direct bribing by suppliers.

"The fakellaki system (ed. note: envelopes containing bribe money) is still in use at big hospitals in Athens, run by the heads of procurement," says one Greek executive working for a foreign medical supplier.

Patent-protected drugs have been sold to the Greek health system in high volumes at prices which are relatively low by EU standards. One consequence was more than 850 million Euros last year in "parallel exports" of medicines bought cheaply by Greek pharmacists and resold abroad. The government responded in recent months by banning foreign sales of some medicines after domestic stocks ran out.

Once patents expire, the lack of any requirement for Greek doctors to prescribe cheaper, generic versions means patented drugs still represent nearly 80 per cent of total prescriptions in Greece, compared with less than 30 per cent in Germany. Yet generics were traditionally sold at relatively high prices, with very low discounts to patented drugs. Even after recent reforms, they are typically only a third cheaper, compared with lower rates of nearly 90 per cent in the UK.

Vassili Kontozamanis, a former Greek drug regulator, calls for greater efforts to boost generic prescribing at lower prices, but he cautions that such moves are meeting resistance from the country's powerful generic drug industry, which employs more than 15,000 people.

Recent government reforms have included non-binding prescription guidelines, and cuts in drug prices amounting to 1 billion Euros, with the aim of reducing the state's medicines bill to 1% of the GDP by the end of 2012. But reforms at state hospitals are making only modest progress amid strong opposition from medical staff.

• The depreciation of Greek government bonds - an additional cost for Bank Austria

Bank Austria, the division of Italian bank UniCredit, may see further depreciation of the Greek government bonds which it owns of about 100 million Euros, but will post a profit in 2011, Willibald Cernko, the general manager of the Austrian bank said yesterday, quoted by Reuters, according to Agerpres.

In an interview with "Wirtschaftsblatt", Willibald Cernko said: "We have already written down 60%. We will in total write down 80%, that means that we will write down about another 100 million Euros".

After booking the Greek government bonds at their market value, the downward trend of the market may change in this year's first quarter, the head of the Austrian bank explained.

Discussing the impact of the Hungarian law (a country where Bank Austria is active), which allows the repayment at a preferential rate of the loans taken out in foreign currencies, in particular in Swiss Francs, Willibald Cernko said that the bank he leads was not as affected as other lenders: "We are not that exposed to this area, we were cautious and we set aside about 60 million Euros. But we are still among the most profitable banks in Hungary".

He also said that he expects 2012 to be positive and said that the bank wouldn't be needing any state aid.

In Romania, UniCredit is present through UniCredit Ţiriac Bank.