The energy sector cannot be modernized as long as state companies are lead by inexperienced people, close to the political, US Ambassador to Bucharest Mark Gitenstein said on Thursday. He said that Romania needs 10 billion dollars to modernize the energy sector.

According to the US official, Romania’s government used these state companies as piggy banks to address short term cash problems. He gave the example of Romgaz that was urged by the government to donate 100 million euro to the government to cover budgetary emergencies and government representatives were mandated to approve the request.

In Romania, the US Ambassador said, such special price cuts for consumers are oftentimes offered on political affiliations rather than on rational business plans. He recommended the government to liberalize the energy market in order to take advantage of its energy resources and said that he understands the impact over individual consumers of such a measure.

However, he added that this problem could be addressed through the introduction of subsidies to poor social categories like it happens in the US or Hungary. For Gitenstein, the government’s idea to create to energy giants to include all state companies is not an efficient one. Instead, he proposes the partial or total privatization of such companies.