Romania's post-Communist political system is based on the French multi-party parliamentary model with a separately elected president. The president, elected by popular vote for a five-year term, is head of state and commander-in-chief of the armed forces. With his advisers, the president develops national policies for the government and acts as the focus of national unity.
The president appoints the prime minister subject to the approval of the bicameral legislature. The prime minister is responsible to the parliament and while he may appoint and dismiss members of his cabinet, the appointments are subject to the approval of both houses of parliament.
Legislative power is vested in a 332-member Chamber of Deputies and a 137-member Senate. The members are elected by popular vote on the basis of geographic proportional representation. They serve for four-year terms.
When the Communist regime ended in 1999, 10 years of economic instability, including a three-year recession, followed. Reforms demanded by the International Monetary Fund (IMF) as a condition for much needed loans were carried out and loans were granted in 1999. In 2000, economic reform, in an effort to make a bid for European Union (EU) membership, led to growth in economy by four to five percent each year, especially in the service sector, followed by industry and agriculture. Potential is also seen in tourism.
Many state-owned companies - including banks, large oil companies, and energy and telecommunication companies - were privatized as of 2005 and are now limited liability or joint-stock companies. Thousands of privately owned small service sector businesses have also sprung up.
Inflation has fallen steadily since 2000 and was around 7.5 percent and still declining in 2005. Both the GDP and minimum wages have steadily increased. In July 2005, the unemployment rate was down to 5.5 percent, lower than many other large European countries.
Romania's strengths are its abundant natural resources, agricultural and industrial sectors which take advantage of these, advances in local technology, and autonomy in food production. Still, some of the older Communist regime mentalities, corruption, and red tape continue to hinder some business dealings. Poverty among the population also needs to be addressed.
Romania joined the North Atlantic Treaty Organization (NATO) in April 2004 and the European Union (EU) on January 1, 2007. Major trading partners include other EU members and the United States.