GALATI, Romania -- Towering chimneys spew red, yellow and purple clouds of polluted air across the battered derricks and drab apartment blocks of Galati.


Grubby children play in the fall- out and the gray haze.


Water runs brown from the bath taps in this Danube steel town and the food in its restaurants is little better than the gruel of a poorhouse in a Charles Dickens novel. Unemployed youths loiter aimlessly.


Many Romanians consider Galati the end of the world, a basket case of socialism gone crazy. The aura is still there.


The riverside city, 250 kilometers east of Bucharest, was once a thriving and pretty grain trading center, straddling the junction of the rivers Danube, Siret and Prut. It is now a sprawling and choking mess of Stalinist over-industrialization.


Local government boss Nicolae Beuran and Galati -- pronounced Galats -- mayor Eugen Durbaca do not think it is so bad.


But considering they are members of the former Communist Party elite who built the area's heavy industry and managed to hang on to power after the 1989 revolution, that is not surprising.


County prefect Beuran, an ally of President Ion Iliescu, was No. 2 in Galati county before Romania's dictator Nicolae Ceausescu was ousted and executed in 1989.


In a pattern mirrored across Romania, Beuran became No. 1 and his predecessor went into business.


Beuran lyrically reeled off data about the achievements of his area in a style reminiscent of Communist bureaucrats, how its development was favored by the abundance of water and about its glowing potential as a foreign investment location.


Empty bookshelves line his office wall. Tomes on market economics have not yet replaced Ceausescu's collected works.


"About 230,000 hectares of land have been privatized from a total area of 300,000," he says. But farmers were then pressed into new "farming associations" on 220,000 hectares, which the opposition consider a covert new form of collectivization.


"The land is all being worked, there are surpluses, the Sidex steel plant is rebounding. All is well," says Durbaca.


Durbaca was head of a state-owned shipping company in communist times, a highly-privileged job. His tenure of mayor has been dogged by media allegations of corruption, including mixing private business with his official position.


"Iliescu came here and promised to keep paying off the workers, to keep the steel mills going. He said if you keep quiet, we'll take care of you," said a well-informed resident.


Union bosses at Sidex were extremely circumspect. In a gesture unusual for union leaders anywhere, they refused to reveal average wages paid by the plant.


"We cannot tell you how much we earn. It's secret," says Viorel Beltic, a union leader at Sidex.