Nastase, 51, tells Institutional Investor that the bargain-basement $60 million sale to the Anglo-Indian parent of steel giant Ispat International is the best example yet of his 11-month-old government's commitment to reviving economic reform efforts. "It is a test for my government, because many people consider we are not committed to privatization," Nastase says.

Of Eastern Europe's large industrial concerns, none is more critically important to its country's economy than Sidex. The complex employs more than 27,000, accounts for 4 percent of Romania's industrial production and contributes $300 million to annual export earnings.

To win Sidex, LNM agreed to forgo layoffs for five years and invest $351 million in the outdated steel mill. Romania, for its part, agreed to give LNM a five-year tax holiday and cancel much of the plant's debt.

The deal caps a strong first year for Nastase's Social Democratic government, which so far is ful- filling its promise to push for deficit reduction and privatization, ending a decade of dithering over reform. In the first three quarters of 2001, GDP was up 5 percent, industrial production grew 10 percent, and the country's inflation rate dropped below 30 percent.

Nastase acknowledges that the months ahead will be rougher, as Romania is buffeted by the economic slowdown gripping Western Europe. But he vows to move ahead with plans to find a strategic investor for Banca Commerciala Romana, Romania's largest bank, early next year. And his geopolitical outlook is sunny: He asserts that the aftermath of September 11's terrorist attacks will help attract investors to his country. "We might discover that Romania is considered as a safer place to go," he says.