Criticism
The fund has been experiencing serious management difficulties, delays, and scandals since its creation. This fund is also widely disputed by the beneficiaries and all owner's associations, considering it is not a real compensation scheme since the shares cannot be properly sold on the market and it is insufficient in size. It has been also criticized by the press, the civil society, and political parties in Romania. It appears that the fund is still not in a position to compensate anyone, mainly because it cannot be floated in the financial market and for the weak amount of money that the Romanian State makes available for the fund. In 2009, according to many newspapers and commentators, the image of the fund and of the State of Romania has been seriously tarnished by the long series of issues and failures.
The fund has been liquid for the victims only once, for a very limited amount: 500,000 Lei (around 166,500 USD or 118,778.80 Euros) for each owner, whatever the extent of injury, and for a very limited time (within 6 months from 1 October 2007 ). It allows only rarely the compensation of the deprivation of property. Many of the former owners die before receiving any compensation.
The European Court of Human Rights (or ECHR) has repeatedly condemned Romania for its failure to return the real estate, but also to pay for compensation. In November 2009, it is still not considered by the European Court of Human Rights as an acceptable means of compensating the confiscations. According to the Romanian newspaper Ziua, the refusal of Romania to change its legislation in order to make effective the restitution of confiscated properties, or to offer a swift and decent compensation, led the ECHR to threaten Romania with an outright exclusion of the organization (21 May 2009). On 21 October 2009, the newspaper Evenimentul Zilei dedicates a long article of the never ending condemnations of Romania, considered by the ECHR unable to compensate dispossessed owners. Romania has lost more than 100 trials since 2007, and had to pay nearly 18 million euros in damages awarded by the Court to the plaintiffs.
The Council of Europe states that a systemic problem in Romania due to the mechanism of the fund. The Committee of Ministers has regularly highlighted a deficiency regarding the respect of private property right. The Committee emphasizes the lack of compensation following the deprivation of property, which amounts to confirm the ineffectiveness of Fondul Proprietatea.Thus at its last meeting on June 6, 2009, the ministers states on the basis of the 88 cases involving the absence of restitution or compensation for nationalized property, subsequently resold by the State to others:1. recall that the issues raised in these cases relate to a major systemic problem, particularly related to the absence of restitution or compensation for nationalized property, subsequently resold by the state to others, a problem that must be addressed as quickly as possible to avoid a significant number of new, similar violations;2. note that the European Court in a number of cases that have recently become final, said, inter alia, that the Romanian authorities should take the necessary legislative measures to prevent the occurrence of situations where two titles related to the same property coexist, and also amend the administrative mechanism established by the laws of repair so that it becomes really coherent, accessible, timely and predictable;3. invite the Romanian authorities to submit an action plan on measures taken or envisaged to improve the current mechanism of restitution;; in this context they noted with interest that bilateral consultations are envisaged between the authorities involved in the process restitution and the Secretariat;4. consequently decide to resume consideration of these matters at the latest af their 1st HR meeting in 2010 in the light of the action plan and to provide information on individual measures.
Romania is the only country in the former Eastern bloc to join the European Union, where such a problem concerning the situation of property connected with the collapse of communist regimes remains unresolved. None of the other ex-Soviet bloc countries have raised a real estate issue with such a magnitude at European level.
Given the seriousness of the situation and the inertia of the Romanian state, despite hundreds of convictions of the European Court of Human Rights, the latter launched on 25 February 2010 as a pilot-judgment procedure. The hearing was held 6 September 2010. The ruling is expected in September 2010. It could be accompanied by sanctions against Romania such as the obligation to amend its legislation, or the exclusion of the Court.
