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Romania: New Property Law Falls Short Of Full Restitution

  • Eugen Tomiuc

More than 11 years after the fall of the Ceausescu regime, Romania has a new law providing for the restitution of property nationalized by the communists. Prime Minister Adrian Nastase calls the legislation a "signal to foreign investors" that the status of private property in Romania has finally been clarified. But critics say the law in inadequate and fails to settle the restitution issue. RFE/RL correspondent Eugen Tomiuc reports:

Prague, 15 February 2001 (RFE/RL) -- Romania's new restitution bill, signed into law last week by President Ion Iliescu, immediately became the target of fierce criticism from both former owners and tenants of once private property.

In general, the law provides for the restitution of state-confiscated property to its rightful owner. But some of the most valuable property nationalized by the communists -- including buildings used by public institutions -- is exempted. Former owners of such property will be compensated by either unspecified sums of money, or by goods, shares in companies or even services. The amount of compensation to be paid will be determined in the next 18 months.

Previous owners say the new law in effect bars them from regaining property already bought by tenants under an earlier restitution law passed six years ago. They argue that, even though the new law allows for the annulment of the earlier sales, it also excepts from annulment cases where tenants bought the houses in what the law calls "good faith."

The former owners say it will be very difficult, if not impossible, to prove a lack of "good faith," which is not defined in the law. Maria Teodoru, the head of a group of former owners, says the new law is even more unfair than the previous one because it legalizes abuses committed both before and after the fall of communism.

Teodoru says under the earlier 1995 law, former owners were able to recover just over 1 percent (3,600) of an estimated 300,000 items of property nationalized by the communists. At the same time, she says, almost a third (88,000 items) of the property seized were bought by the tenants occupying them.

Teodoru tells RFE/RL that former owners will continue to protest the new law, which they say violates their right to own private property. If the law is not changed, she says, they will ask the help of international institutions such as the Council of Europe. Teodoru says they may also knock on the doors of foreign embassies in Bucharest:

"If we really come to the conclusion that we live in a country where neither the constitution nor international treaties that Romania has signed are respected -- and that we live in a jungle -- then we will go to the embassies of civilized countries and ask for mass emigration."

Under the new law, unless local authorities provide what the legislation calls "adequate" alternative housing, present tenants of property seized by the communists are entitled to remain an additional five years in houses qualifying for restitution. Most of these tenants will pay very low rents during the five-year period.

Those who bought their homes under the 1995 legislation -- and some present tenants -- also find the new law unfair. They fear that its "good faith" provision will work against them. Eugen Plesa, an ultra-nationalist parliamentarian and head of a tenants' association, says the law was tailored to suit the interests of former owners or their successors. He tells RFE/RL that tenants will be "punished," while those he calls "impostors" will try to use the law to their own advantage.

"Houses should be given back to those from whom they have been taken. But it is the communists who took them who should be punished, not us [the tenants]. What do they have against us? You cannot change history, you cannot punish or destroy citizens in order to benefit someone who probably did not have any connection with the former owner."

Plesa says he wants the 1995 law to be reinstated. That law was criticized by many as favoring the tenants of nationalized property, who were allowed to buy the houses at prices considerably below their market value. Many of the tenants were members of the former communist elite -- the "nomenclatura" -- who had earlier nationalized the best housing available. The new tenants paid low rents.

The current law owes its inception to the Council of Europe's Parliamentary Assembly, which in 1998 urged Romania to come up with new property restitution legislation. The assembly acted after some 2,000 former owners lodged complaints at the European Court of Human Rights, an important Council of Europe organ.

The final language of the new law is considerably different from the draft bill submitted three years ago by Valeriu Stoica, a right-wing politician who was then justice minister. Today, Stoica himself acknowledges that the inclusion of the "good faith" clause in the current law is regrettable. But he says a better version was not possible because of the need for compromise with leftist parliamentarians.

But despite the law's shortcomings, Stoica tells our correspondent, the current law is still a big step forward.

"Compared to the previous 1995 law, this law is -- regardless of its imperfections -- a huge leap toward the reconstruction of the private property system in Romania. That is the reason why liberals [like myself] agreed with it during debates in the Senate."

Applying the law, however, may prove difficult. Unclear compensation rules will likely sow further discord among the original owners and previous or current tenants. And more legal actions can be expected, adding to the cases already before the European Human Rights Court.

Last month, President Ion Iliescu, a former communist, spoke out against the right to private property, which he called "a frill." At the same time, as he has often done in the past, Iliescu praised the virtues of collective property.

Many analysts say that, whatever the virtues or shortcomings of the new law, Iliescu's remarks do not bode well for the full restitution of once-private property in Romania during his four years in office.