Radu Magdin, Financial Intelligence, 1 October 2026
Table of contents
Summary
Romania has entered an economic phase in which passively attracting Western capital is no longer sufficient. Western capital has become selective and is reallocating its assets, opening up space for regional competitors. Six neighbouring economies are already on the offensive (Poland, the Czech Republic, Hungary, Greece, Turkey and Israel), actively expanding into the Romanian market, whilst Ukraine is set to become a major player after the war. This is what Radu Magdin argues in his latest article for Financial Intelligence.
Although there are already a few Romanian champions making overseas acquisitions (Banca Transilvania, TeraPlast, Aquila, Pavăl Holding), these remain the exception. For Romania to make the transition from a mere destination to a regional investor, the future government must take on three major economic priorities:
- Restoring competitiveness – through infrastructure, a predictable tax system and the reduction of red tape.
- Attracting foreign investment – retaining Western capital and attracting investment from Asia and the Global South.
- The internationalisation of Romanian businesses – supporting exports and financing the cross-border expansion of local companies.
Article
Romania has prospered over the last two decades largely on capital from the West. The next phase calls for something different. We will still need to attract capital, but we will also have to learn to generate Romanian capital capable of playing a role in the region. Around us, six economies have already gone on the offensive. The seventh, Ukraine, will change the game the day the guns fall silent.
Capital doesn’t leave. It circulates.
For twenty years, the economic story of Central and Eastern Europe has been almost linear. Capital flowed in from the West, and the region’s countries vied to welcome it: factories, banks, hypermarkets, energy networks, service centres. The winners were those offering land, cheap labour and a favourable tax regime.
Western capital remains essential. However, the major groups have become far more selective. They are reviewing their portfolios, withdrawing from markets where they are no longer number one or two, and concentrating their resources where returns and strategic stakes justify the effort. The returns that the region offered 15 or 20 years ago no longer come automatically.
Carrefour is the most recent and telling example. The French group sold its Romanian operations to Pavăl Holding in a deal worth 823 million euros, and from 30 June 2026, Carrefour Romania no longer featured in the group’s results, a decision linked to its focus on core markets. One detail is worth noting: the Polish group Żabka was also among the potential buyers mentioned in the international press. This time, the asset remained with a Romanian group. There is no guarantee that the same will be true next time.
The shake-up is not coming solely from the West. OTP, the Hungarian bank which for years was the symbol of Budapest’s regional ambition, has withdrawn from Romania by selling its subsidiary to Banca Transilvania. Regional capital is also reassessing its bets.
We are not witnessing an exodus. Romania continues to attract investment. We are witnessing a maturing of capital, and in such a phase only one thing matters: who is prepared to buy when someone else is selling. This leads to the question that truly interests me. Who is occupying the vacated ground? The answer compels us to look much more closely at Romania’s 6+1 competitive neighbours.
The northern flank: Poland, the Czech Republic, Hungary
Poland is a textbook example of an economy that has transitioned from being a destination for Western capital to becoming an exporter of its own capital. Polish companies no longer come to Romania merely with products. They come to buy, to build networks and to gain market share.
Żabka has done so methodically. The group entered Romania in February 2024, acquiring a majority stake in DRIM Daniel Distribuție, and within two years the Froo network had grown to 204 shops. Its stated ambition is much greater: the group is talking about 4,000 shops in Romania. In the pharmaceutical sector, the trend has been even more pronounced. Polpharma, Poland’s largest pharmaceutical manufacturer, acquired Biofarm in a deal worth approximately 270 million euros – one of the most significant takeovers on the Romanian capital market in recent years. We are talking about a company that has been on the market since 1921, with brands such as Carmol, Triferment and Colebil.
I have no criticism of the seller. Every exit has its own logic, and Polish money is welcome. However, these transactions tell us something about who currently has liquidity, appetite and a regional strategy.
The Czech Republic is following the same playbook, albeit with less fanfare. EMMA Capital, through Premier Energy, has built a robust energy platform in Romania and the Republic of Moldova and continues to grow through acquisitions. Czech capital realised long ago that the region is its natural market.
Hungary is deliberately pursuing the creation of regional champions in banking, energy, telecommunications and industry. Some attempts succeed, others do not, and OTP’s exit shows that even Budapest does not win every battle. The direction, however, remains clear: Hungarian capital is seeking a regional footprint, with a state that supports it without reservation.
Warsaw, Prague and Budapest no longer view us merely as neighbours or as an export market. They view us as a territory for expansion. This is precisely what I have termed, in other writings, ‘coopetition’: we are allies in NATO, partners in the European Union, standing shoulder to shoulder on the eastern flank, and uncompromising competitors in the market. These two realities are not mutually exclusive. Problems arise only when one side overlooks the other.
The southern flank: Greece, Turkey, Israel
Competitive pressure is also coming from the south.
Following the 2010 crisis, Greek banks withdrew almost entirely from Romania. Greek capital, however, returned through a different channel: energy, infrastructure and property. PPC, which took over Enel’s assets, has become one of the key players in the Romanian energy sector, and for many Greek companies, Romania has once again become the natural market for expansion.
Turkish capital has become more sophisticated. It no longer means just trade, construction or traditional manufacturing, but increasingly energy, industry, logistics and acquisitions with strategic implications. For Ankara, Romania is both an important market and a platform within the European Union.
Israeli capital has a long history in Romania, in property, agriculture, technology and energy, and continues to view the Romanian market as one of the natural gateways to Central and Eastern Europe.
Greece, Turkey and Israel are not all neighbours on the map. However, they are, ever more clearly, neighbours in the market.
+1: Ukraine
The factor that could rewrite the regional equation is Ukraine.
Today it operates as a war economy. Tomorrow, reconstruction will attract capital, international financial institutions and companies specialising in infrastructure, energy, technology, logistics and industry from all over the world. The Odessa–Galați–Constanța corridor could become one of Europe’s economic arteries.
Geography gives us our position. It does not give us the dividends.
There is an asymmetry that we should recognise now, not in five years’ time: Ukrainian firms could gain ground in Romania and the European Union more quickly than Romanian firms are gaining ground in Ukraine. Nova Post has expanded internationally in the midst of the war, and Romania is one of the markets where this is evident. After the war, this trend will accelerate.
The reconstruction of Ukraine cannot be viewed from Bucharest solely in terms of transit, ports and motorways. It is a competition for economic standing. If Polish, German, French, American or Turkish firms penetrate the Ukrainian economy more quickly and more deeply, whilst Ukrainian firms enter Romania in the meantime, we risk a paradox: being one of the main gateways to reconstruction without being amongst its main corporate beneficiaries.
We have a few champions. We need a generation.
The good news is that we are not starting from scratch.
Banca Transilvania has acquired OTP Bank Romania and, through Victoriabank, holds a significant position in the Republic of Moldova. TeraPlast has gone even further than we might have expected a few years ago: following the Republic of Moldova, Hungary, Austria and Croatia, Spain has become the group’s fifth foreign market. Aquila has completed the takeover of KITAX, one of the top five distributors in its sector in Hungary, a move which the company’s management has described as its entry into a second foreign market, following the Republic of Moldova. Pavăl Holding has moved on from Praktiker Hellas to a transaction of a different magnitude: Carrefour Romania.
The issue is one of scale. Four or five names that anyone following the market can rattle off do not constitute a national strategy. These cases must cease to be exceptions and become the start of a pattern.
I have argued on several occasions that Romanian statecraft will never be complete without Romanian businesscraft. We deliberately need a larger cohort of companies capable of buying, investing, producing and selling across borders. Not through protectionism. Nor through the administrative selection of so-called ‘winners’. But by building an ecosystem in which high-performing Romanian firms can become regional players, and some of them, global players.
Three priorities for the next government
Romania must bounce back, not just in terms of economic growth statistics, but in its ability to compete. In a region where others are playing an offensive game, the next government should put three major economic priorities on the table.
The first is a return to competitiveness. The figures are stark. Romania has dropped 12 places to 61st out of 70 economies in the IMD 2026 ranking, trailing behind Poland (41), Hungary (51) and Bulgaria (56). The details are even more worrying: we have slipped to 69th place in business environment efficiency, down from 50th, and to 61st in government efficiency, down from 44th. Being second-to-last in business environment efficiency is not merely a statistic. It is the message received by every board that compares us with Warsaw or Budapest. The problem cannot be reduced to a budget deficit or an unfavourable economic cycle. Competitiveness means infrastructure, competitively priced energy, a predictable tax system, a government that makes decisions swiftly, human capital, digitalisation, innovation and, above all, a state that does not hold back companies seeking to grow. You cannot aspire to be a leading regional economy with second-rate tools.
The second priority is attractiveness to foreign investment. Western capital remains fundamental, but competition for it is far fiercer than it was ten or twenty years ago. Romania must once again become an obvious choice when a board in the United States, Germany, France or the United Kingdom decides where to locate its next factory, energy investment, logistics hub or technology operation. At the same time, we must prepare for another wave: that of capital from Asia and the Global South. As the EU’s trade relations with India, Mercosur, the Gulf states and Asian economies deepen, Romania can become one of the European hubs for this capital. Foreign investment is not just about jobs. It means a country’s capitalisation, technology, know-how and connection to the decision-making centres of the global economy.
The third priority is the internationalisation of Romanian capital and the growth of exports, elevated to the status of a national economic objective. This requires dedicated funding, guarantee schemes, trade intelligence, support for overseas acquisitions and genuine coordination between the state, banks, investment funds and entrepreneurs. We already have proof that these instruments work when they are in place: Exim Banca Românească provided €14.7 million in financing for TeraPlast’s acquisitions in Hungary and Spain. What is lacking is scale and consistency. We have very capable people in economic diplomacy. They need a clear political mandate and commensurate institutional support. Romania must not only know how to invite investors to Bucharest, but also to accompany its companies to Warsaw, Prague, Istanbul, Dubai, Delhi or São Paulo.
These three priorities are mutually reinforcing. Competitiveness attracts investment. Investment capitalises and modernises the economy. A more competitive and better-capitalised economy, in turn, produces companies capable of exporting and purchasing beyond its borders.
From an attractive Romania to a proactive Romania
This is the paradigm shift we need.
The first wave that transformed Romania was Western capital. It remains vital, but has become selective, and every major investment must once again be earned. The second wave is regional capital: Polish, Czech, Hungarian, Greek, Turkish and Israeli. It is welcome, provided we understand that the economies producing it are simultaneously our partners and competitors. The third wave will increasingly come from Asia and the Global South, seeking platforms for access to the European market.
Romania must attract all these waves. But it must also learn to generate its own wave.
In the coming decade, Romania’s economic success will no longer be measured solely by how many foreign companies have factories or service centres here. It will also be measured by how many Romanian companies have factories, subsidiaries, networks and customers in Warsaw, Budapest, Prague, Athens, Istanbul, Chișinău or Kyiv, and further afield, in the major hubs of the global economy.
Our 6+1 competitive neighbours are not a threat. They are a sign that the region has matured and that the others have already gone on the offensive.
Our journey has three stages: from Romania as a destination to Romania as a platform and, increasingly, to Romania as an investor. The others have already climbed the first two. It is up to us to keep pace – and to do so quickly.
More by Radu Magdin
Photo: (source: The Bridge of Friendship, via Gemini)
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