From January to June of this year, Romania held the six-month rotating Presidency of the Council of the EU. According to Alexandru Petrescu, Romania’s Ex-Minister of Communications and Information Society, the presidency was an excellent platform for promoting Romania’s vision for Europe and making its mark on the most important European issues going forward. During its term, Romania made good progress on a number of key issues involving the digitization of the economy and fair access to information. Here, Petrescu discusses cybersecurity, artificial intelligence, privacy and other issues that will increasingly shape our digital world, explores governments’ responsibility in making good use of the power of technology and explains why Romania has become a tech hub within the European Union.
What has been your experience with the Romanian Presidency of the Council of the EU, and what has the country contributed?
We’ve been dealing with a layer of complexity and unpredictability that brought along a new set of challenges, including Brexit and the EU parliamentary elections of May 26, so the background for our presidency has been a demanding one. But Romania set out with great ambitions for its presidency, and not just in terms of the digital agenda. In terms of the latter, we are particularly well placed to deal with EU-wide challenges. We have had an amazing presidency, and the feedback has been outstandingly positive. Even on complicated dossiers, we managed to close them or make significant progress. For instance, we closed a very important file which is now becoming a directive about public sector information (PSI) that will allow all tech innovators and all SMEs in the digital business to access information that is currently held by public authorities of all kinds. We are talking about a wealth of data on the weather, traffic and urban concentration to name just a few. This raw data can be transformed by a technology innovator who will come up with an amazing app that can use this data to create commercial value for the business and real-life value for its customers and users. We’re talking about social apps, educational apps, disaster response apps and more. There is a wide range of possibilities for data that is currently stored but is not easily accessible to small entrepreneurs with limited funding. This new directive will create an obligation for a certain level of interconnectivity, giving a fair chance for everyone to grow and innovate in the digital economy.
Are there any security issues when we are talking about data on that order of magnitude?
Cybersecurity is going to be our companion for the rest of our lives. Everything we do at this point needs to first consider cybersecurity issues. The more digital our lives become – at the personal, professional and administrative level – the more everything will have to include cybersecurity. If you take a look at top blue-chip companies, you see fewer oil and gas companies and more technology, cybersecurity and mobility firms there, and by mobility I mean those making the software at the heart of the auto industry, for instance.
What other initiatives are you involved with at the EU level?
Within the dossiers that will become directives, some are financial instruments, such as the Digital Europe program, which will provide funding of €9.2 billion starting in 2021 and up to 2027 for supercomputers, artificial intelligence, blockchain, cybersecurity, high-tech jobs and improving skills. This ties in with digital inclusion because it is all too easy to leave people and businesses behind if you go too fast and don’t work to get the whole digital ecosystem to develop uniformly and sustainably. This program has also been closed by the Romanian presidency: we worked on the operational part of the program and clearly defined the allocation of the funds. After that, the proposal will go to Ecofin, and the final green light will be given in the fall.
Another program in the shape of a financial instrument is the Connecting Europe Facility program, with funding in the range of €43 billion split between three sectors. The lion’s share is going to energy and transportation, and the remaining €3 billion is going to the digital industry, where it will be invested in fiber optics and better interconnectivity to create a level of unification across all the member states. These programs are now at a very advanced stage.
What about growing privacy concerns in the digital world?
Another important program is E-privacy, where there are a lot of disputing interests and preoccupation by member states with various approaches to privacy. You have to strike a balance between holding on to a fundamental right of European and global citizens, and the availability of information for commercial purposes and advancing economic objectives. Our role in the presidency of the EU Council on the Digital Agenda was to make progress on this file and to encourage debate at the expert and political level. I am happy to say that we have found convergence on a lot of points, so I am confident that by the end of the presidency, if we haven’t closed this file yet, at least we’ll be in a much better place than when we started.
Security is another major concern in the digital world. How have you used the presidency to address this?
One of the most recent issues was the initiation of the European Center for Cybersecurity Competence against a backdrop of concern about security in the digital world. This center will focus on research and development and will transfer data directly to the frontlines of cybersecurity with the aim of reducing the impact of incidents. It represents a transition from diagnostical cybersecurity to preventive cybersecurity, and this can only be done through investment in R&D. If one or two countries are the target of attacks, the others should immediately transfer their data in real time, so the risk of data loss is reduced and the impact is minimized. In 2015, the EU made a decision to try to create a Digital Single Market to bring some coherence to the sector because without it, it doesn’t matter how well prepared one particular country is for a cyber-attack: we are all as weak as the weakest member state. So this center of competence wants to prepare everyone equally and ensure prompt and comprehensive mutual assistance.
Where would you rank Romania on this list of e-preparedness?
It should normally rank rather high, although in practice it does not. We are hoping to leapfrog from our current position to above average. But depending on the issue, we are higher or lower: in e-commerce, for instance, there has been tremendous growth, but not enough for significant cross-border e-commerce. As a government, we strive to develop policies that will bring clarity to the market and to legislation, because the appetite for e-commerce by consumers and companies is there. Romania has some of the world’s best fiber connections, we have 4G and we are ready to launch the tender for 5G, so in terms of communication infrastructure, we are in a top position. But we still need to create more awareness about the importance of digitization and increase usage by citizens of the public sector services that have already been digitized. Romanians have a great appetite for online news and social media, and that trend makes me very optimistic. Everything at the end of the day is about improving citizens’ lives, and e-government is not just about easier ways to pay taxes and so on: it’s also about transparency in government and better ways to ensure a participative attitude of citizens. So for me, this is a socially centered approach as much as a technological one.
Where would you say that Romania is on that level?
In terms of e-government, we are not where we want and are capable to be, so we still have steps to take. My background is in transactional banking and my specialization is payment technologies, so I am aware that in Romania you can successfully do banking transactions at higher speed and greater accuracy than in other countries. The banks here are strong operators and they have adopted the latest technologies. You see the same drive in mobile phone operators, and that kind of attitude benefits everyone.
How do you see Romania’s overall legacy as EU Commission President?
Romania is remarkably pro-European and will remain so irrespective of challenges facing the EU. During these six months our contribution should prove to be really significant, and everything we do, and the way we approach every issue, is about coherence and unity. Romania has an increasingly strong voice and we expect equal treatment to all other member states in every field, whether the food industry, the medical industry, manufacturing or anything else. Equal treatment for everybody is a pillar of the Union philosophy, but the most important thing is that everyone is willing to put in the effort, and not just at the ministerial level. This successful presidency has been diligently prepared for the last two years at every level, and there’s been a lot of effort from the central administration and confidence in our ability to make it a success.
What made you switch to the public service after a successful career in the private sector?
It wasn’t just a matter of changing sectors, but also a question of changing my country of residence. I was living in London, working as vice-president of one of the oldest financial institutions in London, and I was offered the possibility of working as CEO of the national postal service back in Romania. I felt motivated and confident I could contribute with my professional know-how, that my level of expertise and knowledge could be highly beneficial for a top position in a company strategic both for Romania as well as for the entire EU, such importance being placed on the national postal operators. I felt that things could be improved and developed, that policies could be more commercially oriented and that even social and economic goals could be better achieved this way. So when the opportunity arose, the natural answer was yes. The benefits of this radical change in my life continue to this day, and I would make the same decision again if given the choice.
Your case illustrates the importance of attracting talent. How can Romania do that more effectively and become an R&D hub?
What I’ve been constantly doing is keeping close to the tech community – start-ups, innovation hubs, blockchain enthusiasts, academics and experts. We have strong company proposals for blockchain, but what Romania lacks is a regulatory framework allowing them to function the way they want to, so they end up registering in other countries such as Malta or the Baltic nations. But there is still a chance to do pioneering work here in Romania. For instance, I am fostering a dialogue with blockchain communities – students, entrepreneurs, specialized lawyers and more – to work out a policy that will keep those companies at home and maybe attract back those that have registered elsewhere. Those other small nations have used digitization as a form of increasing their own competitive edge and added value. Romania is still one of the largest countries in the EU and we will keep working to be a leader in this and other sectors. We are well educated in technology and have been doing a great job of promoting women in high-end jobs, both in academia and in business, and we’ve been attracting significant investments.
Where are Romania’s tech companies located? Is there a specific hub?
Digital companies have been branching out of Bucharest, which remains a core location for attracting technology investment, but when you talk about innovation and start-up technology communities, there is also Cluj in the heart of Transylvania. And when you think of technology makers you think of Iasi, and when you talk about technology and communications you are talking about Timisoara. So there are several important tech hubs developing across the country, and this is also because of the good level of fiber optic transmission and high-speed internet access that provide that possibility to set up companies in those places. The IT&C services sector is a primary growth driver that contributes 5.2 percent to GDP, and this sector is expected to reach €6.3 billion by 2020.
What is the relationship like with Germany?
In terms of commerce, Germany is our main partner. Last year we had €32 billion in trade with Germany, representing almost 20 percent of overall trade. We have 22,000 German capital businesses registered here and FDI worth €5 billion. Daimler has increased its capacity here and has plans for a new expansion, and there is also Aerotech and Airbus. The German presence in Romania is highly representative, especially in the automotive industry: Germany is the third-largest investor in Romania after the Netherlands and Austria. It’s been a source of inspiration, a promoter and a partner in restarting education in this country. In the 1990s we lost some ground on the education front, but we are getting a lot of help from German partners – NGOs, the ministry of education, Lander authorities… all the main investors are also sponsoring local schools and dual education classes where specialized training allows graduates to step straight into the work environment. And in terms of digitization, you find a lot of Romanian SMEs in the digital economy, from start-ups to medium-sized businesses that deliver mobility software to the German auto industry, for instance. It started with hardcore auto parts like gearboxes and other components, and over time this evolved on the back of Romanians’ natural digital skills, so now this relationship is quite strong.
What are your views on the relationship between digitization and a wave of nationalism in some EU countries?
Romania is one of the few countries in Europe where you will find very few nationalist political organizations, and if you look at the Romanian government you will not find any ultra-nationalist groups there, which is not always the case in some other western and central European countries. Digitization, on the other hand, brings people together, it brings a cohesive market for communication: we’re talking about business platforms, about social media. Digitization should bring us together and reduce the challenges posed by potential nationalist approaches to technology. Technology should be approached from a beneficial perspective to citizens and SMEs. There are many EU-wide discussions on the matter, but technology is basically a conductor of communications and governments must consider their responsibility as to what extent we should empower technology to allow full communication or filter real news from fake news. Technology puts a lot of social responsibility on our shoulders. We need to strike a balance between technology adoption, fair dissemination of media information, and benefits for SMEs and citizens while also ensuring their protection from risks and threats coming from the digital world.