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Category: The Week in Review

  • The Week in Review 27 April – May 3

    The Week in Review 27 April – May 3

    President Klaus Iohannis pays a visit to Italy


    Romania’s president Klaus Iohannis paid an official visit to Italy, the country home to the largest Romanian community in the Diaspora. The president met with Prime Minister Matteo Renzi, who said that the members of the Romanian community in the Peninsula are well integrated, contribute to Italy’s economic growth and represent a bridge between the two countries. President Iohannis and Prime Minister Renzi also reviewed economic and cultural bilateral relations, as well as Moldova’s bid to join the European Union. In Rome, Klaus Iohannis met with his counterpart Sergio Mattarella and with Romanian students and scholarship beneficiaries with the Accademia di Romania, whom he congratulated for their excellent results. Klaus Iohannis said he would pay another visit to Rome on May 15, during his visit to the Vatican.



    The Romanian Senate endorses the Fiscal and Fiscal Procedure Codes


    The Romanian Senate has endorsed the Fiscal Code and Fiscal Procedure Code bills. The new codes are aimed at reducing taxation by eliminating certain taxes and duties, curbing tax evasion, boosting consumption and stimulating economic growth. Among the provisions in the code are the VAT reduction to 9% for foodstuffs starting June 1, and from 24 to 20%, as of January 1, 2016, for all goods and services. The new codes also provide for the scrapping of the special building tax and the 16% tax on dividends, and for reducing the flat tax rate from 16 to 14% starting January 2019. The opposition has criticized the Government’s measures, labeling them unrealistic. The new Fiscal Code is to be tabled to the Chamber of Deputies for debate, which holds the decision-making power in this case.




    Prime Minister Victor Ponta visits Strasbourg and begins tour of Gulf states


    Prime Minister Victor Ponta paid an official visit to Strasbourg, where he met with high-ranking EU officials. Talks focused, among others, on the economic context in Romania, in relation to European Commission president Jean-Claude Juncker’s investment plan. Victor Ponta assured Romania’s partners in the EU that Romania is a prime competitor in the region, after four years of economic growth. Also this week the Prime Minister began his tour of the Gulf area, with his first stop being Saudi Arabia. It was actually the first visit of a Romanian Prime Minister since diplomatic relations were set up with this country, 20 years ago. The tour’s main objective is to revitalize political and diplomatic relations and consolidate economic and trade relations. The Prime Minister will showcase business and investment opportunities in Romania, in such fields as constructions, infrastructure, agriculture, industry, energy, IT and healthcare.






    The Senate rejected the so-called “Big Brother” draft law


    The Senate in Bucharest rejected upon re-examination the draft law on cyber security, the so-called “Big Brother” law. It had been previously rejected by the lower chamber. The National Liberal Party, in the opposition, argued against this law in Constitutional Court in January. The court ruled that this bill was unconstitutional overall, lacking coherence, clarity, predictability, as well as having procedural gaps, since it lacked endorsement from the Higher Defense Council. The bill addresses, among other things, the retention of data generated by providers of public electronic communication networks, as well as by the providers of electronic communication services for the public.




    The Romanian economy should be prepared to join the Eurozone, according to National Bank governor, Mugur Isarescu


    Romania should prepare carefully to join the Eurozone, especially by eliminating sources that put great pressure on the economy, said National Bank Governor, Mugur Isarescu. According to him, before adopting the Euro in 2019, the Romanian economy should be prepared, because the standing exchange rate regime entails some risks. Thus, there is need for restructuring state companies and the energy market, as well as clarifications regarding co-financing from the state budget and developing road infrastructure. According to a recent study, the number of insolvencies has dropped in Romania in the first quarter of this year to less than half compared to the same period in 2014, even though the social and financial impact upon the economy was greater, considering that layoffs went up 24%.



    The 2015 car-scrapping scheme was officially launched


    Romania has kicked off the car-scrapping scheme for 2015. In exchange for scrapping a car older than eight years, owners get a voucher worth 6,500 lei, about 1470 Euro, which they can spend on purchasing a new car or transfer to another natural person. The amount allocated this year for the program is 200 million lei (about 45 million Euro), 33% more than last year, and the authorities expect 20,000 drivers to get new cars. In the ten years the program has been running, about half a million old cars got scrapped. In addition, the Ministry of Finance plans to change by June the emissions sticker for cars, in order to encourage the purchase of less polluting cars.


  • The Week in Review April 20-24

    The Week in Review April 20-24

    EU Summit on Illegal Migration


    European leaders met in Brussels for an emergency meeting to address the phenomenon of illegal migration. They decided to triple funding of rescue operations in the Mediterranean Sea, also calling on the UN to impose military sanctions on Libya in an attempt to hit people-smuggling networks in that country. Representing Romania at the Summit, president Klaus Iohannis voiced solidarity with Mediterranean riparian states, which are the most affected by this phenomenon. The president also called for increasing the budget of Frontex, the European Agency for the Management of External Borders, for any actions undertaken in the area. Additionally, Bucharest is willing to dispatch several experts on the ground. The medium and long-term growing concern is to address some of the root causes of migration, namely poverty in African countries. The EU summit was called in the wake of the latest shipwreck in the Mediterranean, which killed 800 African migrants.



    Romania and Cooperation with the Europol


    One in five cyber defense experts working for Europol is Romanian, Europol director Rob Wainwright said in Bucharest. The Romanian Police Service is rated as one of the most involved European law-enforcement agencies, ranking 6th in a top of 12 countries in terms of data exchanges with Europol, Interior Minister Gabriel Oprea has said. Here is what the Minister said in relation to Romania’s Schengen accession:



    “Romania has the responsibility of stopping the flow of illegal migrants on the EU’s eastern borders. We can notice that measures taken so far ensure a secure, free and legal migration. We have a state-of-the-art integrated border security system and one of the most significant contributions to Frontex actions. For this reason, I believe Romania’s accession to Schengen would entail clear benefits for the security of the EU and its members”.



    CIA Detention Center in Romania


    Former Romanian president Ion Iliescu told German weekly “Der Spiegel” that in the wake of the devastating terrorist attacks of September 11 Romania provided the Central Intelligence Agency in the US with a secret facility to carry out operations in Romania. Ion Iliescu explained this was meant as a gesture of goodwill towards the US ahead of Romania’s joining NATO in 2004. The former president also said that Romanian authorities were unaware of the activity of the Agency in that facility. German commentators say Ion Iliescu is the second head of state, after Polish President Aleksander Kwasniewski, to admit to the existence of CIA secret detention facilities in Europe. Despite repeated investigations, these detentions in East-European states, including Romania, remain shrouded in mystery 10 years after their existence surfaced in the media. “Had we known what was going to happen there, the answer would have surely been negative”, Iliescu said, responding to allegations key members of Al-Qaeda were purportedly tortured in these CIA secret centres.



    Healthcare Pact


    The Romanian PM Victor Ponta has this week proposed a healthcare pact to be signed by all political parties in the country. The head of government believes a guarantee for steady funding in the system, the improvement of working conditions and a salary increase could put an end to the massive outflow of healthcare specialists from the country. Victor Ponta:



    “To say that starting tomorrow we will double or triple doctors’ salaries would be unrealistic. We need 2, 3 up to 4 years in which to gradually increase wages and we also need to give them the opportunity to make incomes in the private sector. If there are no good prospects for doctors, the European competition is sure to leave us without the best doctors.”



    Previously the healthcare minister Nicolae Banicioiu had said that, without a substantial salary increase within three years, the system would collapse. Other factors contributing to the migration of Romanian doctors to western European countries is the lack of new jobs in the system, the insufficient number of hospitals and the growing number of patients.



    Tax on Tips


    The Government of Romania has passed an emergency order that makes all incomes including tips, subject to taxation. According to the new legislation, the extra money paid by customers for goods delivered or services provided by business operators will be registered on separate receipts. Here is Finance Minister Eugen Teodorovici:


    “First of all, when they come to work employees will have to declare the cash they have on them and register the amount in separate records kept by employers.”



    Tips will be subject to a 16% tax, and employers are free to either keep the amounts or give them to the employees.



    No Visas for Canada


    On Wednesday the government of Canada announced having decided to include Romania in the list of countries for which the Electronic Travel Authorisation (eTA) will apply as of 2016. Romanian citizens having had a Canadian visa for the past 10 years or who have a temporary USA visa will thus be able to enter Canada without a visa, following electronic registration in the eTA system. According to the Romanian Foreign Ministry, this decision, a major step in the process of full visa lifting, reconfirms the constant dialogue between the Romanian and Canadian authorities towards solving this issue. It is also a signal of the political will to have Romanian citizens enjoy visa-free travel to Canada, just like the other EU citizens.

  • The Week in Review, 13-19 April

    The Week in Review, 13-19 April

    The International Monetary Fund has revised upwards its initial predictions about Romania’s economic growth rate


    The Romanian economy will grow at a faster pace this year than initially predicted, says the International Monetary Fund in its latest report. The Fund has revised its forecast about Romania’s GDP in 2015 up by 0.3%, to 2.7%. In 2016, the IMF now expects a 2.9% growth rate, compared with its previous 2.5% put forward in October last year. The main factor underlying this growth is the consolidation of private consumption amid a strong increase in real wages, low oil prices and record-low interest rates. Standard & Poor’s rating agency estimates that Romania’s economy will grow by 3% on average every year between 2015 and 2018. The agency affirmed its long and short term local and hard currency BBB-/A-3 ratings for Romania with a stable outlook.



    The European Parliament held a hearing on the Cooperation and Verification Mechanism with regard to Romania and Bulgaria


    The European Parliament’s Committee on Budgets on Tuesday heard a series of Romanian and Bulgarian officials on the Cooperation and Verification Mechanism applied to the two states when they joined the European Union in 2007. The hearing was held at the request of Romania, who believes its success in combating corruption should be acknowledged and a clear timetable should be set for entering the passport-free Schengen area. The chief prosecutor of the National Anticorruption Directorate Laura Codruta Kovesi said the monitoring mechanism played an essential role in the reform of the judiciary and the fight against corruption in Romania. She reiterated that the latter should not be subject to political interference and said the state should ensure the necessary instruments to combat corruption. “The fight against high-level corruption in Romania is impressive”, said the Secretary General of the European Commission, Catherine Day during the European Parliament hearing. She said Romania must continue to consolidate the results obtained, especially in fighting corruption at lower levels. In another development, the Clean Romania Coalition and the Academic Society in Romania have published a Map of Local Corruption in Romania indicating the country’s most corrupt regions. Bucharest is the most corrupt area in Romania, followed by the counties of Maramures, in the north-west and Bacau, in the east, while the least corrupt counties are Salaj, in the north-west, Mehedinti and Teleorman, both in the south, and Botosani, in the north-east. The map is based on the figures released by the National Anticorruption Directorate in the last five years. The survey also shows that mayors are the public officials most vulnerable to corruption.



    The state of infrastructure in Romania


    EU Commissioner for Regional Policy Corina Cretu visited Romania, where together with Transport Minister Ioan Rus she visited a segment of the Sebes-Turda motorway, a priority project for the European Commission. The project is part of the Trans-European Transport Network TEN-T which the Commission finances. The motorway is to be completed by mid-2016 and will connect the Transylvania motorway, in the centre, to the European Corridor IV that runs all the way to the Black Sea. Additionally, the Pitesti-Sibiu motorway segment has become a top priority of Romania’s transport strategy, the European Commission notes. The employees of the Dacia Renault car plant in Mioveni, southern Romania, have this week protested against the Government’s delay in building the motorway, which they see as potentially having negative consequences on their jobs.



    Verbal hostilities continue between Russia, NATO and Romania


    In the last few months, Moscow’s threats on European member states hosting elements of the NATO anti-ballistic shield have doubled. The latest episode in the series of harsh exchanges between Bucharest and Moscow authorities came on Thursday, when the Chief of General Staff of the Armed Forces of Russia General Valery Gerasimov warned that any state hosting elements of the shield, such as Romania and Poland, would become priority targets for Moscow. Bucharest and NATO officials were quick to respond. In a message posted on a social networking site, Prime Minister Victor Ponta dismissed the threats and criticism voiced by various officials of the Russian Federation, arguing that they do not intimidate Romanian authorities and cannot produce a change in Romania’s strategy. NATO spokesperson Oana Lungescu gave assurances that the Alliance’s anti-missile shield does not target Russia.



    NATO military drills in Romania


    In the current regional security context, Romania is hosting two important multi-national military drills conducted by NATO. In the southeast, over 2,200 military and equipment from Romania, the United States, the United Kingdom and the Republic of Molodva are involved in the Wind Spring 2015 military drill, which will end on April 30. Wind Spring seeks to bring stability and security in the region, considering the tense security climate in NATO’s eastern flank. In Campia Turzii, north-western Romania, a joint military drill is taking place, bringing together 350 US military and some 300 Romanian military. Commander of the US Air Forces in Europe Lt. Gen. Darryl Roberson said the drill is NATO’s response to Russia, signalling the US’s concern for ensuring security in Europe as one of its top priorities.

  • The Week in Review April 6-12

    The Week in Review April 6-12

    Government slashes VAT for foodstuffs


    The Government in Bucharest decided to slash the value-added tax for foodstuffs, non-alcoholic drinks and food industry services, from 24 to 9% starting June 1, six months before the new Fiscal Code takes effect. The reason for the early introduction of this measure was the additional revenues to the budget, higher than originally estimated, Prime Minister Victor Ponta explains. Other products and services will also see a 4% slash, down to 20%, starting January 1, 2016. The VAT for bread was slashed to 9% in 2013. The Romanian Government claims the measure will have an impact of 1.1 billion euros on the state budget, although the population will benefit from additional consumption opportunities. The measure is also aimed at stimulating consumption and hence economic growth. Some pundits however have warned that the VAT slash will result in an increase of the budget deficit.





    European Commission vice-president Valdis Dombrosvskis visits Bucharest


    The Romanian Government’s fiscal relaxation measures will have a negative impact on the economy, says European Commission vice-president Valdis Dombrovskis, the EU Commissioner for the Euro and Social Dialogue. The EU official said that Romania however reported significant progress in what regards macroeconomic imbalances. Valdis Dombrovskis said Romania’s economy is developing. The country has implemented important reforms of its international financial assistance programme, both in terms of the budget deficit and regarding its shortfalls. It must continue structural reforms related to the privatization of state-owned enterprises, the effectiveness of public administration and the absorption of European funds. The European Commissioner attended the launch of the European programme “The Youth Guarantee”, whereby 400 thousand young people in Romania will be able to find a decent job over the next 4 years by using Commission funds.




    Statute of Romanian MPs is changed


    Romanian MPs have changed their statute, to the effect that the prosecution, detention or pre-trial arrest of a Deputy or Senator may be approved on the vote of the majority of MPs attending the meeting in which the prosecutor’s request is being discussed. The change brings Parliament’s Rules of Procedure in line with the Constitution, as the previous statute allowed for incongruities between the two Chambers. The National Anti-Corruption Directorate has recently called on the Senate to greenlight the pre-emptive arrest of Dan Sova. Although most MPs voted in favour, Senate dismissed the request for lack of quorum. The decision created a public uproar, as previous requests were approved with a simple majority of those attending the meeting.




    Judicial decisions in Romania


    The Constitutional Court of Romania has taken note of the notification sent by the Superior Council of Magistracy regarding the constitutional conflict between the Public Ministry and the Romanian Senate, regarding the latter’s refusal to draft and publish the decision attesting the result of the vote in the plenary session of the Senate on the arrest pending trial of Social Democrat Dan Sova, a former Transport Minister, as requested by the National Anti-Corruption Directorate. The High Court decided that the Senate has the obligation of drafting the decision adopted in the plenary session of March 25 and to refer it to the relevant public authorities and publish it in the Official Gazette. In another development, the High Court of Cassation and Justice approved another request by the Directorate to extend the arrest warrant issued for Marian Vanghelie, the suspended Mayor of Bucharest District 5 City Hall, for another 30 days. Vanghelie is being investigated for abuse of office, bribe taking and money laundering. The former chief of the National Integrity Agency Horia Georgescu, who was also placed on arrest pending trial on March 18, was indicted together with another 11 people. Georgescu is accused of having approved overvalued compensation for property confiscated by the former communist regime while working at the National Agency for the Return of Property. Damages to the state are estimated to stand at 84 million euros.




    Verbal hostilities continue between Russia, NATO and Romania


    Romania is a trusted ally of NATO, and NATO will defend all its allies against threats of any kind, reads a NATO press release made public on Wednesday. The statement is a reaction to the accusations formulated by a Russian Foreign Ministry spokesperson targeting Bucharest. NATO believes that Moscow has violated international law and failed to observe the commitments provided for in the NATO-Russia founding act by means of its ingressions in Ukraine and its repeated defying statements, which are ungrounded, highly inappropriate and only undermine stability and predictability at EU level. According to the Russian Foreign Ministry, the Romanian Government is forfeiting regional security by hosting the deployment of NATO forces on its territory. Prime Minister Victor Ponta has hailed NATO’s reaction to the position of the Russian official, saying that Romania, as a NATO member state, will only take decisions that are fair and appropriate for the security objectives of Romania and NATO. NATO’s standpoint in the matter fully reflects Romania’s position, Romanian Foreign Minister Bogdan Aurescu also said in Bucharest.

  • The Week in Review March 23-27

    The Week in Review March 23-27

    The government approves the new fiscal and fiscal procedure codes


    The Romanian government has approved the new draft Fiscal and Fiscal Procedure Codes, which were forwarded to Parliament for debate and approval. The codes are meant to speed up economic growth by cutting down on taxation. The new provisions with the greatest impact are the reduction of the VAT from 24% to 20% for all goods and services, and to 9% for meat, fish, milk and dairy products, eggs, vegetables and fruits. Although these reductions are supposed to take effect as of January 2016, PM Victor Ponta claims that they might be applied before that date. He added that the new fiscal codes would not affect either pensions or salaries, and that a flexible and modern framework would be created for local fees and taxes. Excise duties on the main energy products will drop. Other measures provided for in the new fiscal code, to take effect as of 2018, are aimed at reducing the social security contributions to be paid by employers and employees by 2% and 3% respectively. As regards the flat tax, it will drop from 16% to 14% as of 2019. Eliminating taxation of dividends, the tax on special constructions and reducing excise duties are other measures to be implemented by 2020. The parliamentary opposition has announced it will propose amendments to the two codes. The Liberals believe that an increase in local fees and taxes, resulting after the implementation of the two new codes, will affect the business environment. They promise to analyze the sustainability of some of the measures announced by the government dominated by the Social Democrats in order to avoid a shortage of funds for pensions, salaries, healthcare and education.



    The anti-corruption fight continues in Romania


    The former finance minister Darius Valcov will be investigated under house arrest in a case in which he is accused of influence peddling. Investigators claim that between 2008-2009, when Valcov was the mayor of the town of Slatina (in the south of Romania), he preferentially awarded contracts on public money in exchange for 2 million Euros in bribe. He was placed under temporary custody on Wednesday, several hours after the Senate approved the National Anti-Corruption Directorate’s request for his arrest. However, the senators have rejected a similar request in the case of the former transport minister Dan Sova who is accused of accessory to official misconduct, in a case in which prosecutors are investigating the activity of two state-owned energy companies. The Senate’s decision regarding Dan Sova, known to be a friend of PM Victor Ponta, sparked off a wave of criticism and reactions from the Romanian president, the opposition, the National Anti-Corruption Directorate and several foreign embassies in Bucharest. President Klaus Iohannis notified the Constitutional Court, asking them to look into the constitutional conflict between the judicial and legislative branches in Romania. The Romanian president believes that Parliament’s attitude in cases such as that of Dan Sova has created institutional blockages, as it prevented the implementation of the legal procedures and the judicial process. The opposition Liberal party has also challenged the Senate’s decision at the Constitutional Court, which announced it would deal with the matter on April 8th. The vote in the Senate has re-ignited the public debate on the controversial immunity of Romanian MPs.



    Romania marks 97 years since its union with Bessarabia


    On March 27th Romania marked 97 years since its union with Bessarabia, a historical province in the east of the country. On the occasion, the minister delegate for the relation with the Romanians in the Diaspora, Angel Tilvar, paid an official visit to the Republic of Moldova. In Bucharest, the speaker of the Moldovan parliament, Andrian Candu, met with the Romanian PM, the foreign minister and the presidents of the two chambers of Parliament, who reiterated their support for the Republic of Moldova’s European integration. The union of Bessarabia with Romania was marked in both countries by debates, book launches, symposiums, concerts and religious ceremonies. On March 27th 1918, the Country’s Council (the legislative body in Chisinau) decided on the union of this province, with a predominantly Romanian-speaking population, with the motherland. Until then the province had been under the Tsarist empire rule. The current ex-Soviet Republic of Moldova was set up on part of the Romanian eastern territories, which were re-annexed by Moscow in 1940, following an ultimatum given by the Soviet dictator Stalin.



    Romanian-British relations


    The British defense secretary, Michael Fallon, paid a visit to Romania to talk with his Romanian counterpart Mircea Dusa about the security situation in the Black Sea area and the measures to be taken by the two states to ensure a permanent presence in the region, by rotation, of NATO assets. Fallon announced that Great Britain would contribute troops to the two NATO commands that will operate in Romania. The two officials also tackled the political and military situation of the region against the background of the Ukrainian crisis and of Crimea’s annexation by Russia. The developments in the EU’s eastern neighborhood, especially those in Ukraine, were also examined in London by the Romanian foreign minister, Bogdan Aurescu, together with his British counterpart Philip Hammond. The two hailed the close relations and the good cooperation between the two states, which are based on a Strategic Partnership that mainly focuses on security and defense.

  • The Week in Review, March 9-15

    The Week in Review, March 9-15

    Romanian-German bilateral relations


    German Foreign Minister Frank-Walter Steinmeier this week paid an official visit to Bucharest. The German official argued in favour of finding a solution to allow Romania to join the Schengen Area, also underlining the progress mentioned in the latest report made public under the Cooperation and Verification Mechanism for Romania. Bucharest says Romania is already acting as a Schengen Member, while its official accession would only add to the security of the area. During his talks with Romanian officials, Minister Steinmeier said that Romania had been making progress that German investors appreciate, although a lot more still needs to be done in terms of transparency. The approximately 350,000 Romanians currently employed in Germany are among the best-integrated workers on the German labour market, while any biased attitudes towards them are ungrounded, the German official also said. Germany is Romania’s largest trade partner and third-largest investor.




    President Klaus Iohannis visits Poland


    Romania’s president Klaus Iohannis paid an official visit to Poland, where he discussed with his counterpart Bronislaw Komorowski security developments in the region, with a focus on Ukraine. Bronislaw Komorowski said Poland was counting on Romania’s support as regards strengthening NATO’s eastern flank, and argued in favour of taking important decisions at the NATO summit to be held next year in Warsaw, which should help ensure security in the region. Talks also focused on the Strategic Partnership between Romania and Poland and the two officials signed a joint declaration aimed at boosting cooperation.



    Bronislaw Komorowski: “This partnership is extremely necessary in the context of the latest developments in part of Europe, where regional security has undergone certain negative changes”.


    President Iohannis also referred to the crisis in Ukraine:


    Klaus Iohannis: “I have reiterated Romania’s full support for the sovereignty, independence and territorial integrity of Ukraine within its internationally recognized borders. I have vocally condemned the serious deterioration of the security situation in south-eastern Ukraine, also expressing hope for a progressive implementation of the measures provided in the Minsk agreement of February 12”.


    Klaus Iohannis also pointed out that Romania wanted to attract a larger number of Polish visitors to Romania and to increase the presence of Romanian businesses on the Polish market.



    Historical high for the American dollar


    The American dollar has this week reached a new high, being traded at 4.2 lei, according to the currency exchange rate made public by the National Bank of Romania. On the Romanian currency market the dollar is rated against the dollar- euro exchange rate on the international markets, and its fluctuation is mainly the result of the difference between the monetary policy of the European Central Bank and that of the American Bank, explained Ionut Dumitru, the vice-president of the Romanian Association of Financial and Banking Analysts. For Romania, the impact at economic level is limited, given that the relation with the American dollar has diminished once the country joined the EU.



    European Commissioners in Bucharest


    The infrastructure projects included in Romania’s transport master plan will also be financed from EU money. 6.8 billion euros will be allocated for this purpose by 2020. The European Commissioner for Regional Policy, Corina Cretu, said in Bucharest that Brussels was waiting for Romania to submit the final version of its transport master plan, which is a requirement for the approval of the Large Infrastructure Operational Programme. The master plan includes projects that can be funded through the Infrastructure Operational Programme as well as other projects that could be implemented with European money accessed from the funds allotted for the 2014-2020 period. The Romanian transport minister, Ioan Rus, has pointed out that the list of investment projects included in the transport master plan is ready and that the document will be finalized by the end of April. Another EU official to visit Bucharest this week was the European Commissioner for Agriculture, Phil Hogan, who has had talks with Romanian officials about the situation of pork meat in certain European countries, Romania included, following Russia’s ban on imports from the European Union. Although they do not export to the Russian market, Romanian farmers are faced with certain problems caused by the surplus of pork products on the European market, which has led to a significant drop in the price of pork meat.



    The anticorruption fight goes on


    Another Romanian politician has come under the fire from the National Anti-Corruption Directorate, namely the mayor of Bucharest’s sector 5 and a former Social Democratic Party member, Marian Vanghelie. He is being investigated in a case regarding the award of public contracts. According to anti-corruption prosecutors, Marian Vanghelie is suspected of receiving 20% of the value of the contracts signed by the Sector 5 mayor’s office since 2007 with companies controlled by another businessman who is currently in custody for involvement in a different corruption case. It is estimated that Vanghelie received around 90 million euros this way, using as intermediaries people in his entourage and companies, including one managed by his partner, Oana Niculescu Mizil, herself a former member of the Social Democratic Party, who is also being investigated in this case.

  • The Week in Review 16-22 February 2015

    The Week in Review 16-22 February 2015

    The fight against corruption continues to be a top priority of the Romanian judiciary


    Another former Romanian minister, accused of corruption, has been put behind bars earlier this week. Monica Iacob Ridzi, a former rightist Sports and Youth Minister, received a final sentence of 5 years in prison for abuse of office. According to the National Anti-Corruption Directorate, in 2009, Monica Iacob Ridzi, as the main authorizing entity, decided to illegally outsource the organization of Youth Day celebrations to several companies of her choice. In another case, the Chamber of Deputies’ Legal Committee approved, on Wednesday, two new requests for the prosecution and arrest pending trial of former Tourism Minister Elena Udrea. Prosecutors brought new charges against her, in one of the two corruption files opened on her name. On Thursday, Prime Minister Victor Ponta’s brother in law, Iulian Hertanu, was placed under 30-day custody pending trial, following accusations of fraud involving European money. For their involvement in the same case, deputies Sebastian Ghita and Vlad Cosma, both representing Prahova County, are now subject to legal restrictions pending trial. The same decision was made for Vlad Cosma’s father, Mircea Cosma, the president of the Prahova County Council. The damage to the state has been put at 1.7 million euros plus over 550 thousand euros from tax evasion.



    New people at the helm of the Romanian Intelligence Service and the Constitutional Court


    On Thursday Romanian President Klaus Iohannis nominated the Liberal MEP Eduard Hellvig for the position of chief of the Romanian Intelligence Service. Hellving was born in 1974 and studied Political Sciences. He has been a member of the National Liberal Party since 2008, and in 2012 was appointed regional development and tourism minister in Victor Ponta’s government. If endorsed by parliament next week, Eduard Hellvig will become the 5th director of the Romanian Intelligence Service since 1989, taking over the post previously held by George Maior, who resigned last month. While waiting for the Parliament’s vote, Hellvig wrote on his Facebook page that strengthening ways to defend national security and curbing corruption would be his top priorities. Equally important to consolidate democracy is the work of the Constitutional Court judges, who, as of Wednesday have a new colleague. Simona Maya Teodoroiu has replaced Toni Grebla, who is prosecuted for corruption.



    The Government has proposed a set of fiscal relaxation measures


    The Romanian Government has announced a relaxation in fiscal targets that should be enforced under a new Fiscal Code. Among the new measures is the reduction of the VAT from its current level of 24% to 20% next year and to 18% in 2018. For basic foodstuffs, such as meat, fish, vegetables and fruit, the VAT will be 9% starting in 2016. Effective as of 2017, contributions to the social security fund will stand at 7.5% for employees, as against 10.5% today, and at 13.5% for employers, as compared to 15.8% at present. Also, the flat income tax will be reduced to 14%, starting 2019. The Romanian Finance Ministry has also proposed lower excises on diesel and on lead-free gasoline. On the other hand, according to the new Tax Code, all individuals making income shall pay contributions to the social security and health insurance funds, while taxes on micro-enterprises, just like property taxes, will go up. The new Tax Code will be under public debate for a month, and then submitted to Parliament for approval.



    Consular dialogue with the Romanian Diaspora


    “Dialogue with the Diaspora on consular themes” is a program launched early this week by the Romanian Foreign Ministry. According to the Ministry, the programme is meant to provide Romanians at home and abroad with correct information and full access to modern consular services. The programme sets new guidelines as to the behaviour of consular staff, who are encouraged to be open, friendly and reliable and show concern for the needs of each citizen resorting to their services, as laid down in the Code of Conduct of the Romanian Consular Corps. The programme is carried out in the first half of 2015, with a foreign ministry team travelling to countries with large Romanian communities, where Romanian consular offices are particularly busy, such as Italy, Spain, France, Germany, Great Britain, Austria, Belgium and Greece. The Foreign Ministry experts will meet the Romanian communities in these countries and present the new system of computerised consular services, E-cons.



    Romania’s neighbour country, Moldova, has a new Government


    The Parliament of the Republic of Moldova has avoided early elections, by giving its vote of confidence to the government headed by businessman Chiril Gaburici. After November’s legislative elections, no party or alliance had the parliamentary majority required in order to endorse a new prime minister. The Bucharest Foreign Ministry is expecting the new Moldovan Government to continue democratic reforms and strengthen the country’s path towards the EU. In another development, in the context of the Ukrainian crisis, officials from Romania and its southern neighbour, Bulgaria, discussed their joint interests related to energy diversification, the development of transport connections by building new bridges over the Danube, and joining the Schengen area. These topics were approached on Thursday in Bucharest by Romanian and Bulgarian foreign ministers Bogdan Aurescu and Daniel Mitov, respectively on Friday by Romanian President Klaus Iohannis and his Bulgarian counterpart Rosen Plevneliev.

  • The Week in Review, February 9-15

    The Week in Review, February 9-15

    Romania understands the threat posed by the armed conflict in the neighbouring Ukraine and joins efforts to find a solution to it


    Romania understands the threat posed by the armed conflict in the neighboring Ukraine and joins efforts to find a solution to it, said Romanian President Klaus Iohannis at his first participation in the European Council in Brussels as head of state. Iohannis pointed out that the only solution to the Ukrainian crisis is a political one, based on dialogue. We have new reasons to hope that observing Ukraine’s independence, territorial integrity and sovereignty will become a priority for all international leaders, Russia included, the head of state also said. According to Iohannis, a declaration on combating terrorism was adopted at the European Council on behalf of Romania, and the measures to be taken will have to be applied equally to both Schengen and non-Schengen members, such as Romania. The declaration lays emphasis on citizen safety, prevention of radicalism of any kind and cooperation with the EU’s international partners. On the sidelines of the European Council meeting, Klaus Iohannis met with German chancellor Angela Merkel and with the Ukrainian President Petro Poroshenko. The latter invited the Romanian President to pay a visit to Kiev. Earlier this week Klaus Iohannis held talks in Paris with his French counterpart Francois Hollande, on the bilateral strategic partnership, the situation in Ukraine and economic developments in the EU. Iohannis also met with representatives of the Romanian community in France.




    Romanian Prime Minister Victor Ponta, on a formal visit to the US, reiterated Bucharest’s interest in strengthening cooperation with Washington in the field of defense.


    Romanian Prime Minister Victor Ponta, on a formal visit to the US, reiterated in a meeting with the then Secretary of Defense Chuck Hagel Bucharest’s interest in strengthening cooperation with Washington in the field of defense. In his turn, Chuck Hagel voiced appreciation for Romania’s contribution to international military operations, in particular the one in Afghanistan, and for the excellent bilateral collaboration. Victor Ponta also met with the US Secretary of Commerce Penny Pritzker and the two officials decided that a delegation of the US Department of Commerce would come to Romania this May to look for business opportunities in the IT technology and cyber security fields. They also assessed the progress made in the implementation of the Bilateral action plan for the improvement of the Romanian business environment. PM Ponta also had a meeting with the CIA chief, John Brennan with whom he discussed the progress made with regard to the Romania-US Strategic Partnership. John Brennan appreciated the good collaboration with the Romanian Intelligence Service and the Romanian Foreign Intelligence Service. The prime minister’s visit to the US has a major economic component as well. Victor Ponta chaired in Washington a round table organized by the American-Romanian Business Council.




    One of the most influential Romanian politicians of the past 10 years, the former minister of tourism and regional development, MP Elena Udrea is under arrest pending trial.


    One of the most influential Romanian politicians of the past 10 years, the former minister of tourism and development, MP Elena Udrea is under arrest pending trial, after the High Court of Cassation and Justice approved the anti-corruption prosecutors’ proposal. Udrea is charged, among other things, with influence peddling in a heavy file related to the illegal purchase of IT licenses for schools, involving several other foreign ministers. Previously, the Chamber of Deputies green lighted the anti corruption prosecutors’ requests to prosecute, detain and arrest Elen Udrea, given that she is also investigated in another famous case. Udrea has been the closest collaborator of former President Traian Basescu, whom she even wanted to replace by running in the presidential elections of November 2014. Also this week the Senate approved the start of criminal proceedings against a former Economy minister, Ion Aritorn, on charges of accessory to abuse of office and misuse of authority. On the same day the Senate refused to green light the prosecution of another former Economy Minister, Varujan Vosganian, accused of setting up a crime group, abuse of office and complicity to embezzlement. The controversial vote comes against the background of criticism leveled at the Bucharest Parliament in the recent European Commission justice report, which is seen as obstructing justice. President Klaus Iohannis made no secret out of the fact that he is disappointed by the Senate’s vote in favor of Varujan Vosganian .




    Due to disagreements over the liberalization of natural gas tariffs and the privatization of several energy companies, the visit to Bucharest of Romania’s international lenders was concluded without the usual letter of intent.


    The misunderstandings over liberalizing the natural gas tariffs and privatizing several energy companies led to the visit to Bucharest of Romania’s international lenders ending without the usual letter of intent. Prime Minister Victor Ponta has said that liberalizing the natural gas tariffs would in fact trigger their significant increase for both individuals and companies. As for the energy companies, Ponta has pointed out that their privatization would affect, in a few years, the Romanian energy sector. Negotiations on these two issues will be resumed in April, the PM said.


  • The Week in Review 02-08.02

    The Week in Review 02-08.02

    Anti-corruption investigations target high profile figures in Romania


    In Romania, the increasing number of high-level corruption cases has grabbed headlines this week as well. Prosecutors have heard high profile politicians and business people and the list expands by the day. Charges against parliament member Elena Udrea, former minister and presidential candidate, range from influence peddling to bribe taking, on top of money laundering and financial statement fraud, in two separate corruption files. Anti-corruption prosecutors filed for a pre-emptive arrest warrant in her name, in the famous Gala Bute and Microsoft cases and Parliament will convene on Monday to decide on whether to lift her immunity or not. Udrea denied all accusations. Also this week judge Toni Grebla resigned his position in the Constitutional Court as prosecutors asked for his criminal investigation. Among the charges against him is favouritism, use of information barred from disclosure and allowing unauthorized persons access to information for the purpose of obtaining money or undue benefits. On Wednesday, President Klaus Iohannis green-lighted the prosecution of former Economy Minister, the Liberal Democrat Adriean Videanu, held under preventive arrest for his involvement in another corruption case, on charges of abuse of office. Videanu was released on Friday morning and is subject to legal restrictions pending trial. These are only a few of the resounding corruption cases being currently investigated in Romania.



    Improved economic growth forecast for Romania


    The European Commission has improved its forecast regarding Romania’s economic growth this year, raising it at 2.7%, which is 0.3% higher as compared with the previous forecast. This economic growth rate, followed by another 2.9% growth rate in 2016, is to be mostly supported by domestic demand and the gradual recovery of global economy. Private consumption is expected to remain robust, against a favourable background of increased salaries, low inflation rates and improved conditions on the labour force market, the EC report reads. Private and public investment is also expected to grow in pace with the volume of exports.



    Two NATO command and control centres to be set up in Romania


    NATO will set up six new command posts on its eastern borders and create a 5,000-strong rapid reaction force in an effort to show resolve and solidarity in the face of what the alliance brands Russian aggression in Ukraine, the Alliance’s Secretary General Jens Stoltenberg announced. Two of these command and control centers will be set up in Romania. Romanian Foreign Minister Bogdan Aurescu hailed the NATO decision to set up command units in Romania and five other allied countries – Bulgaria, Poland, Estonia, Latvia and Lithuania. According to NATO chief Jens Stoltenberg, this is the biggest reinforcement of the Alliance’s collective defence since the end of the Cold War.



    Romania and the jurisdiction of the International Court of Justice


    The Senate in Bucharest has cast a favourable vote on the draft law under which Romania accepts the compulsory jurisdiction of the International Court of Justice — the UN’s main legal body and one of the most prestigious international courts, founded 70 years ago. Until last year 70 countries, including 21 EU members, had accepted the jurisdiction of the International Court of Justice. Through this unilateral move, Bucharest has gained, among other things, the right to bring before the Court in the Hague, another country, which accepts the same jurisdiction. The decision proves that Romania conducts its international relations in strict compliance with the rule of law, the head of the Romanian diplomacy, Bogdan Aurescu, told the Senate in Bucharest. We recall that six years ago, Aurescu won a suit in the Hague against Ukraine on the delimitation of the Black Sea continental shelf.



    Financial decisions in Romania


    The Authority for Consumer’s Protection in Romania has recently been flooded by complaints from bank clients with loans in the Swiss franc who are now unable to pay back their credits. An eventual conversion to the historic rate of all foreign currency loans – as desired by the borrowers — would create 10 billion lei in losses, Central Bank governor, Mugur Isarescu said. According to him the situation calls for individual solutions, as the cases of those with loans in the Swiss currency are different from one another. In the meantime, the Central Bank has trimmed the monetary policy interest rate down to an all time low of 2.25% per year. Central Bank officials have explained that inflation rate remains under the estimates, whereas loaning shows no signs of recovery. The Central Bank has also cut the interest rates on short terms for its bank clients by 0.50% in a bid to balance a provisional currency shortage. The annual interest rate following the implementation of the new loaning facility stays at 4.25%.




  • The Week in Review 26.01-1.02

    The Week in Review 26.01-1.02

    Romania’s foreign lenders look at the country’s progress under a stand-by loan agreement


    A mission of the International Monetary Fund, the European Commission and the World Bank is in Bucharest for the third assessment of Romania’s ongoing precautionary loan agreement, worth 2 billion euros. Until February the 2nd, the international experts are discussing with the Romanian authorities the recent economic developments and the priorities of economic reform. The visit comes at a time when the Swiss franc has reached a record-high exchange rate against the Romanian leu, creating panic among the nearly 75,000 Romanians who have taken out loans in this currency. This has also prompted Parliament to consider endorsing a law on personal bankruptcy. The International Monetary Fund has already sent a letter to the Romanian authorities, voicing concern over the endorsement of such a law without an adequate impact assessment.



    Romanian Intelligence Service chief resigns


    Romania’s main intelligence services are at present without its civilian chiefs. After Teodor Melescanu stepped down as head of the Foreign Intelligence Service in October 2014 and Tuesday’s resignation of George Maior from the Romanian Intelligence Service, the two bodies now have two generals as interim leaders. As a NATO member state, Romania is obliged to have its intelligence services under democratic, civilian control, which is why new chiefs will have to be appointed as soon as possible. In the meantime, George Maior’s resignation, for which no official explanation was given, has generated much rumour and speculation. Most commentators believe the decision was prompted by the Constitutional Court dismissing the so-called “Big Brother” laws, a package of three bills on security, which Maior strongly supported. The package referred to cyber security, the retention of user data by providers of communications services for a period of six months and the sale of prepaid mobile telephone cards.



    Top-level corruption investigations continue


    The National Anti-Corruption Directorate once again made the headlines in Romania this week. After hours of hearings, the MP, former minister and former presidential candidate Elena Udrea has been placed under legal restrictions pending trial, in a case involving an IT license fraud. She is accused of having obtained and used goods that she knew they came from illegal operations conducted by her former husband, businessman Dorin Cocos. His son, Alin, is also charged with bribe giving and influence peddling and is detained in a separate case involving the former chief of the Directorate for Organised Crime and Terrorism Investigations, Alina Bica. Fresh light was shed on the web of corruption around Alina Bica on Thursday, when the former economy minister Adriean Videanu was arrested as well, as accessory to abuse of office. Also on Thursday, the National Anti-corruption Directorate heard the Constitutional Court judge Toni Grebla, who is accused of influence peddling.



    The European Commission publishes report on Romania under the Cooperation and Verification Mechanism


    The European Commission hailed the activity of the National Anti-Corruption Directorate, the National Integrity Agency, the High Court of Cassation and Justice and the Supreme Council of Magistracy with regard to the fight against corruption and the reform of the judiciary. The 2014 report under the Cooperation and Verification Mechanism published on Wednesday in Brussels speaks about corruption investigations leading to the arrest of high-profile figures in the administration and the political scene, as well as the way in which the aforementioned institutions stood their ground when faced with political pressure. On the other hand, the report criticises Parliament for blocking the start of criminal investigations against some of its members, promoting laws that hinder the fight against corruption and delaying the adoption of laws to help the judiciary. During talks with president Klaus Iohannis, the representatives of all parliamentary parties said they are willing to simplify the procedures related to Parliament’s approval of requests to detain, arrest and search members of Parliament. “It’s time for Romania to enter a new stage of the democratic process”, said president Klaus Iohannis. He spoke about resetting the whole system, including the improvement of the voting process for all Romanians, following last November’s elections, when many Romanian voters living abroad were unable to cast their votes because of the bad management of the election process.



    President Klaus Iohannis outlines his main foreign policy goals


    Joining the Schengen area and adopting the euro are the major goals of Romania’s foreign policy, said president Klaus Iohannis in a meeting with foreign ambassadors to Bucharest. The country’s priorities remain largely the same and include Romania’s full Europeanisation, a strong strategic partnership with the United States and further support for the young democracies in the region: the Republic of Moldova, Ukraine and Georgia. President Klaus Iohannis said Romania’s relationship with the Russian Federation is affected by the crisis in Ukraine and improving it requires Moscow’s compliance with international law. In an EU foreign ministers’ meeting in Brussels on Thursday, Romania’s foreign minister Bogdan Aurescu called for the extension by another six months of the Union’s sanctions against Russia.

  • The Week in Review – January 12-16

    The Week in Review – January 12-16

    Political agreement on defence


    Romania’s new president Klaus Iohannis has secured the agreement of all political parties in parliament to allocate at least 2% of the GDP to defence every year from 2017 until 2027. The agreement, which was signed on Tuesday, comes amid tensions generated by the situation in the neighbouring Ukraine. A member of the European Union and NATO, Romania should not rely solely on its allies to ensure its own security, says Klaus Iohannis:


    “We have a duty to treat the situation in the region with maturity and show that we are a responsible nation. We therefore need to provide the army with the necessary means and funds for training and modern equipment.”


    Iohannis believes this will ensure the predictability of military spending, in particular with regard to the training of the troops and the strategic programmes for the army’s equipping.



    President Klaus Iohannis travels to Brussels on his first official foreign visit since taking office


    Romania’s decision to increase defence funding has been hailed by the NATO secretary general Jens Stoltenberg during talks with president Klaus Iohannis. The latter travelled to Brussels on his first official visit since taking office. During his talks with the representatives of the European institutions, Iohannis has also encountered support for his country’s joining the Schengen area, one of Romania’s most important foreign policy goals. Despite meeting all Schengen entry criteria, Romania has been denied access for lack of sufficient progress in the reform of the judiciary. President Iohannis had talks with the head of the European Commission Jean Claude Junker about the Mechanism for Cooperation and Verification ahead of the publication of a new report in a few days’ time on the progress made by Romania concerning justice. Klaus Iohannis:


    “We have agreed that this will encourage us to say that in the following years, during our terms, we will bring this procedure to a successful conclusion, given that Romania has made significant progress in consolidating its institutions, the implementation of structural reforms and the consolidation of the rule of law and the independence of the judiciary.”



    The director of the Romanian Intelligence Service talks about the likelihood of terrorist attacks in Romania


    There is no major risk of a terrorist attack in Romania, so the Romanian Intelligence Service has not raised the country’s terrorism threat level after the attacks in France. Romania has, however, taken a series of additional security measures regarding the protection of possible targets, a better control of the people crossing the border and a better picture of what goes on across Romania in terms of intelligence, said the director of the Romanian Intelligence Service, George Maior. He revealed that a number of terrorist attacks had been averted in Romania as well and said Europe would most likely be the target of more attacks. George Maior also said the European secret services are prepared for a new terror threat level, but that there is no absolute security because prevention cannot be achieved sometimes.



    Visits to Bucharest by envoys of two of Romania’s major strategic partners


    High-ranking officials representing two of Romania’s major strategic partners, the US and Great Britain, have been to Bucharest this week, for talks with Romanian decision-makers. The talks between the Assistant Secretary of State for European and Eurasian Affairs of the US Department of State, Victoria Nuland, and Romanian officials focused on the strategic partnership between this country and the US. The collaboration under this agreement is to be extended to also cover the economic field, not just the military one. On the occasion, Romanian President Klaus Iohannis hailed the US companies’ interest in this sector, and encouraged their presence on the Romanian market. In turn, the US official said that Romania had made significant progress with regard to the reform of the judiciary and the fight against corruption. Also in Bucharest, the British Foreign Secretary Philip Hammond held talks with his Romanian counterpart Bogdan Aurescu, mostly about fighting terrorism. The Romanian side stressed, among other things, that it’s important for the member states to observe the principle of free movement of the work force within the EU.



    Priorities for the development of road infrastructure in Romania


    The Romanian transport minister Ioan Rus has presented the 2015-2016 priorities for the development of road infrastructure and the Transport Master Plan until 2030. Only 700 km of highway are operational in Romania, placing this country on one of the lowest positions in terms of road density. According to minister Rus, the highway network in Romania will be extended by 50 km this year, and by another 200 km in 2016. He has stated that the road infrastructure in Romania has been poorly developed in the past years not because of lack of money, but because of bad projects, which have lacked structure and effectiveness. The Transport Master Plan envisages the building of over 700 km of highway and some 1,800 km of express roads by 2030, at an estimated cost of 30 billion Euros.



    January 15th, Romania’s National Culture Day


    Since 2010 January 15th, the birthday of Romania’s national poet Mihai Eminescu, has also been the National Culture Day. This year, when we also celebrate 165 years since Eminescu’s birth, many solemn sessions, concerts, exhibitions, book launches and film screenings have been hosted by all culture institutions in the country, and also by Romanian cultural centres abroad. In an interview to Radio Romania, the Romanian Minister of Culture Ioan Vulpescu talked about the under- funding that culture in this country is still suffering from. In his opinion, one potential solution is a national strategy for this field.


    “It’s been 25 years since the Revolution and we still lack a strategy that, beyond and despite any election cycles, should promote the values of Romanian culture and civilisation, both in the country and abroad”.


    Romanian culture is in desperate need of coherence and creativity, of an effective management and a proper use of its own resources, the line minister has also stated.

  • The Week in Review 4-10 January

    The Week in Review 4-10 January

    Romania condemns the deadly attacks in Paris


    Romania firmly condemns terrorism and all violence against freedom of speech and the values of democracy, was the message made public by the authorities in Bucharest following Wednesday’s terrorist attack on the Paris office of the Charlie Hebdo magazine. The attack is a cruel and cowardly act, says Romania’s president Klaus Iohannis, who has assured his country’s partners of Romania’s full support in the fight against terrorism and any form of extremism. Prime minister Victor Ponta has also expressed his country’s solidarity with France and has firmly condemned the act of terrorism that threatens fundamental freedoms. The Romanian foreign minister Bogdan Aurescu has voiced outrage at the attack, which he has described as unprecedented. The entire international community has condemned the Islamist attack in Paris in harsh words, and most western states have increased their terror threat level. The Romanian Intelligence Service has said there is no indication that terrorist attacks are being planned in Romania and that there is no need to increase the level of terrorist threat, which remains “cautious”. Founded in 1969 and sold in 45,000 copies, Charlie Hebdo publishes caricatures, reports and controversial and non-conformist content about the far right, Catholicism, Judaism, culture and politics.



    Judge Marius Tudose is the new president of the Superior Council of Magistracy in Romania


    The Superior Council of Magistracy in Romania has elected its new leaders: judge Marius Tudose is the body’s new president, while prosecutor Bogdan Gabor its new vice-president. 42-year-old Tudose says his goal is to improve the efficiency and quality of the judiciary. A magistrate for the last 20 years, he has been a member of the Superior Council of Magistracy since 2011. President Klaus Iohannis, who attended the Council’s meeting, spoke about the need to have an independent and competent justice system with honest judges and prosecutors. He urged magistrates not to give in to intimidation, assuring them that he will be their loyal partner. With regard to the European Commission’s Mechanism for Cooperation and Verification, which assesses Romania’s judicial progress, Iohannis said it remains a useful instrument for Romania. He said, however, that Romania’s legal system must start working better so as to make the Mechanism unnecessary.



    The Romanian President Klaus Iohannis wants a higher budget for the Defense Ministry


    The Romanian president Klaus Iohannis talked with prime minister Victor Ponta about the defence funds for 2015 and about a possible allocation of 0.3% of the GDP for financing military expenses in 2015. Actually the president convened the parliamentary parties for consultations on this topic on Monday. The purpose of the consultations is to reach a political agreement that should ensure a minimum 2% of the GDP threshold for defence in 2017. Other topics approached at the working meeting called by the President were the degree of European funds absorption as well as ways to improve it.



    The National Bank of Romania reduces the monetary policy interest rate


    The National Bank of Romania has reduced the monetary policy interest rate from 2.75% to 2.5%. This is a new historic low, the central bank thus remaining consistent with its actions meant to boost crediting in the national currency. In 2014 the National Bank of Romania reduced the monetary policy interest rate on several occasions, from 4% per year to 2.75%. According the governor Mugur Isarescu, the decision follows a drop in the annual inflation rate under the forecast value, as a consequence of the decline in volatile prices and of the low inflation rate in the Euro zone.



    As of February 1st all Romanians will have to use their national health insurance cards


    In Romania the national health insurance card will become compulsory as of February 1st. Over 12.5 million cards have been issued and about 90% of them have been distributed so far. The health cards’ distribution should have been finalised in November 2014, but around 1 million cards did not reach their holders. Family doctors must activate the cards by January 31st for them to become operational. They announced they firmly rejected the possibility to distribute the cards that have not reached their holders.



    Bucharest hosted the Gala of the League of Romanian Students Abroad


    The young Romanians who obtained the best results at academic and extra-curricular level abroad, received awards in Bucharest at the Gala of the League of Romanian Students Abroad. The 6th edition of the Gala gathered almost 800 students, personalities of the Romanian society, diplomats, civil society representatives as well as journalists. The Romanian Foreign Minister Bogdan Aurescu, who attended the Gala, said that he wanted Romanian students abroad to find the opportunities that should make them return to Romania.



    Romania saw a sharp drop in temperatures


    Romania has been in the grips of frost for several days. The lowest temperature reported in 2015 stood at minus 34 degrees C and was registered in Intorsura Buzaului, in the centre of the country.

  • The Year 2014 in Romania

    The Year 2014 in Romania

    Political Romania in 2014



    From a political point of view, the year 2014 was a pretty dynamic one, as Romanian politicians are usually caught by a particularly kind of frenzy in an election year. After three years of existence, which saw a resounding success at the parliamentary elections of 2012, the most successful alliance in the post-Communist era, as it was described by observers, made up of the Social Democratic Party, the National Liberal Party, the Conservative Party and the National Union for the Progress of Romania left the political scene. After the National Liberal Party entered opposition, the Democratic Union of Ethnic Hungarians filled the vacancy. Three months later, in May, it was the time for the first electoral test of the year, the elections for the European Parliament. Quite predictably, the winner was the trio comprising the Social Democratic Party, the Conservative Party and the National Union for the Progress of Romania, which took half of the 32 seats that Romania was entitled to in the European Parliament. There followed the National Liberal Party and the Liberal Democratic Party, the main parties in the opposition. Also taking seats were the independent Mircea Diaconu, the Democratic Union of Ethnic Hungarians and the People’s Movement Party. Against the disappointment of scoring that low, the leader of the National Liberal Party, Crin Antonescu, made some radical decisions, among which his own resignation and the start of negotiations for a merger with the Liberal Democratic Party. The latter was quite successful and led to the revival of the Justice and Truth Alliance, which ruled in mid 2000s. There followed six months of fierce fighting, which culminated in the campaign for the presidential elections. The vote, held in two rounds, on November 2 and 16 respectively, was won by the candidate of the National Liberal Party, Klaus Iohannis, who, quite surprisingly, defeated the favorite in the race, Prime Minister Victor Ponta. The many flaws in the organization of polling stations abroad outraged public opinion and had anti-Corruption prosecutors start a number of criminal investigations. There followed, in December, the formation of the 4th Ponta Cabinet, and the end of President Traian Basescu’s term in office. After a controversial decade at the helm of the country, Traian Basescu said that Romania is now safer than it has ever been and even a provider of security for other NATO member countries. In turn, the new president, Klaus Iohannis, has listed among his term’s priorities education, health and the reconstruction of political institutions.



    The judicial system in Romania



    In 2014, the fight against corruption, a chronic disease of the Romanian administration, reached its peak. The National Anti-Corruption Directorate worked at an unprecedented rate throughout the year. In the very first week of 2014, the prime minister of Romania in the 2000 — 2004 period, Social Democrat Adrian Nastase was sentenced to four years in prison, in a bribery case. Next came a prison sentence against a former transport minister, the Liberal Deputy Relu Fenechiu. The ex-ministers of justice Tudor Chiuariu and of telecommunications Zsolt Nagy, also received suspended sentences. Eight influential people from Romanian football, including agents, former club owners, and even a famous international player, Gheorghe Popescu, were sent to prison for fraud, money laundering and tax dodging. While still the president of Romania, Traian Basescu found himself in an awkward situation when his younger brother, Mircea, was arrested for having used his influence to get a milder ruling in a trial involving a notorious boss of a criminal gang. The series of criminal cases continued with a 10-year prison sentence given to Dan Voiculescu for money laundering. A businessman, the de facto leader of the Conservative Party in the ruling coalition, and a proven collaborator of the communist political police, the Securitate, Voiculescu caused the state losses worth some 60 million euros in a large-scale real estate sham disguised as privatization. Then came the so-called Microsoft affair, perhaps the largest corruption case of the last 25 years in Romania. Under investigation, among others, are nine former cabinet ministers and business people, suspected of involvement in fraudulent IT license contracts signed by the Romanian Education Ministry. Another complex investigation, in which the state reportedly incurred losses of 300 million euros, targets illegal forest restitution. The suspects include influential politicians and magistrates. Finally, in the last major corruption case of the year, the head of the Directorate fighting organized crime and terrorism, Alina Bica, was held for abuse of office. While she served as secretary of state in the Justice Ministry and a member of a commission in charge of land restitution, she allegedly facilitated the payment of compensation for an overpriced tract of land outside Bucharest.



    Measures taken by the Government and laws endorsed by Parliament



    The Government of Romania took a significant number of fiscal measures in 2014. One of them was a 5% reduction of the social security contributions payable by employers, the additional 7 eurocent excise on fuels and fiscal amnesty for certain categories of pensioners, public employees and mothers. The Government also cut down several charges and gave up the tax on reinvested profits. Also in 2014, the Transport Master Plan and the National Energy Strategy were presented, and new regulations took effect in public healthcare. In turn, the Parliament of Romania endorsed a new Education Law, a new Criminal Code and the Electricity and Natural Gas Act, under which the liberalization of natural gas prices is postponed to 2021.



    25 Years On



    In 2014 Romania celebrated 25 years since the fall of the communist regime, a landmark in Romania’s modern history. Ceremonies were held to honour the memory of the over one thousand victims of December 1989. The events of that year started on the 16th of December in Timisoara, a large cosmopolitan city in western Romania. The anti-communist protests quickly spread across the country, culminating in the execution of dictators Nicolae and Elena Ceausescu on the 25th of December, after a swift trial. Since then, Romania has rediscovered its place in the western world, particularly with its NATO accession in 2004 and EU accession in 2007. However, these 25 years have not been enough to complete investigations in the so-called “Revolution case,” aimed at establishing the truth and identifying the individuals responsible for the violence back then.



    A good year for Simona Halep



    The most highly appreciated Romanian athlete, tennis player Simona Halep, who came to rank 2nd in world standings in 2014, proved that her performances in the previous year had not been an accident. In 2014, Halep won the tournaments in Doha and Bucharest, played the final of the 2014 WTA season finals in Singapore and of the Roland Garros and Madrid tournaments, while in Wimbledon and Indian Wells she reached the semi-finals. She finished the season on the 3rd place in WTA standings, after the American Serena Williams and Russian Maria Sharapova.

  • The Year 2014 in International Politics

    The Year 2014 in International Politics

    The Ukrainian crisis and the new Cold War



    Pundits and political leaders alike see 2014 as the year that marked the beginning of a new Cold War. The fall, in January, of the pro-Russian regime in Kiev, following violent protests that ended in the ousting of president Viktor Yanukovych and brought along a pro-western administration, was followed by Russia’s violent reaction. Remarkable in terms of cynicism and effectiveness, Crimea’s non-violent annexation by Russia in March, proved to be only the tip of the iceberg. The political and military support of the pro-Russian secessionist rebellion in eastern Ukraine followed, claiming the life of 4 thousand people. Among them are collateral victims, such as the 300 passengers of an airliner blown up by the separatists’ artillery. These tragic developments prompted the international community to admit to a rebirth, under the leadership of Vladimir Putin, of Russia’s insatiable appetite for new territories, in a typical Stalinist manner. The United States, the European Union and their partners from the free world, from Canada to Australia, tried to oppose it by using political and economic weapons. Concerned with the evolutions in Ukraine, one of its biggest neighbors in demographic and territorial terms, Romania, an Eastern outpost of the EU and NATO, has called on its western allies to increase their military presence in the region. Romania has repeatedly and firmly stated its support for the sovereignty and territorial integrity of Ukraine, which is home to almost half a million Romanians.



    Electoral victories of pro-Europeans in Kiev and Chisinau


    Voters in both Ukraine and the Republic of Moldova have proved their support for the European bid of these former Soviet republics, which signed association and free trade agreements with Brussels. The only decisive element in a democracy – the elections’ result dismisses Russia’s rhetoric of alleged rights over its former colonies. The pro-Western tycoon Petro Poroshenko was elected president of Ukraine while the pro-Russians became a minority in the country’s Parliament, after the legislative elections. Moreover, it is the first time after 1991, when the country became independent, that the communists were unable to exceed the 5% electoral threshold that they needed in order to make it to Parliament. In Chisinau the pro-Russian communists, socialists and populists lost the elections as well. The so-called Alliance for the European Integration, formed ever since 2009, made up of Liberal Democrats, Democrats and Liberals, on November 30 won for the second time in a row most parliamentary seats and will continue to rule the Republic of Moldova. Moldovan political leaders hope their country will become an EU candidate in 2017 and a full member in 2020. Romania, a staunch supporter of Moldova’s EU integration, given their common language, history, culture and destiny, was the first to hail the victory the pro-Europeans in the neighbouring state.



    European Elections


    May’s European elections confirmed the supremacy of democratic ideologies on the continent, the European People’s Party, the socialists and the liberals, who won two thirds of the mandates. The elections have also raised concerns about the revival, in almost all EU countries, of a discriminatory and anti-migration rhetoric. From Hungary to France and from Greece to the Netherlands, parties perceived as Euroskeptic,, not to say anti-European, sent their representatives in the European Parliament. Romania is not represented in Strasbourg and Brussels by any populist or xenophobic MEP. The 32 seats assigned to Romania went to parties affiliated with the large European groups promoting European values. Representing the left wing is the Social Democratic Party, in power in Romania, who are part of the family of European socialists and the National Liberal party, representing the right wing, which this year have switched from being members of the Alliance of Liberals and Democrats to the European’s People Party (EPP), just like the Liberal Democratic Party, the People’s Movement Party and the Democratic Union of Ethnic Hungarians in Romania, already members of the group.



    Changes at the top of the European institutions


    Supported by his fellow Socialists and the European People’s Party, the German Martin Schultz has been reelected at the helm of the European Parliament for another two years and a half. According to an agreement between the two parties, a representative of the People’s Party will head the European legislative body for a similar period of time. After having led the European Commission for ten years, which during his mandate saw the most extensive enlargement towards the east and the south in the Union’s history, the Portuguese Jose Manuel Barroso has been replaced this autumn, by the Luxembourger Jean-Claude Juncker. In his turn, the Polish Donald Tusk is the first East European president of the Council of Europe, having replaced the Belgian Herman Van Rompuy who previously held this office. Also, Italian Federica Mogherini will lead the EU’s foreign policy for the next five years, a position left vacant by Catherine Ashton of Britain. Romania’s representative in the new European Commission is the former Social Democrat MP Corina Cretu, who now holds the regional policy portfolio. After its EU accession in 2007, Romania has in turn held the portfolios of multilingualism, headed by Leonard Orban and that of Agriculture, headed by Dacian Ciolos.



    Hot Topics on NATO’s Agenda


    NATO has a new secretary general as of this autumn. Former Norwegian PM Jens Stoltenberg has taken over this position from the Danish Anders Fogh Rasmussen. The new secretary general will have to deal with two major issues: the problematic ties with Russia and increased security measures for NATO allies on the eastern flank, Romania included, and the crisis in the Middle East, an area threatened by the Jihadist movement which local governments, highly ineffective, weak and corrupt, seem unable to cope with. Large territories in Syria and Iraq have been under the control of the self-proclaimed Islamic State terrorist group ever since this summer.


  • The Week in Review 15-20 December

    The Week in Review 15-20 December

    Romania’s President-elect Klaus Iohannis will be sworn in on Sunday



    Romania’s president-elect Klaus Iohannis will take the oath of office on Sunday, during a solemn Parliament session, one month after winning November’s elections. On Thursday, Klaus Iohannis resigned from the leadership of the National Liberal Party, the main opposition party, leaving the party’s helm in the hands of parliament member Alina Gorghiu, a 36-year-old lawyer who had been the Liberals’ spokeswoman during the elections. Gorghiu, the first female president of the National Liberal Party, will be interim president until 2017, when a congress that will make official the fusion of the Liberals and Liberal Democrats is held. Until then, Alina Gorghiu will lead the party alongside the Liberal Democratic Party leader, Vasile Blaga.



    Romanian Government undergoes reshuffle


    Romania has a new government, the 4th one headed by the Social Democrat Victor Ponta. The new coalition government is made up of the Social Democratic Party, the Union for the Progress of Romania, the Conservative Party and the Reformist Liberal Party. The latter, a center right party, is a dissident faction of the National Liberal Party, in opposition, that replaced the Democratic Union of Ethnic Hungarians in Romania which left the government. As many as 8 new ministers are part of the government’s new line up while 14 others have kept their seats. PM Ponta has given assurances that the new government will maintain all those measures that render the private business environment stable and predictable, that is the 16% flat tax, the tax exemption for reinvested profit, the decrease in the employers’ social security contribution and the proposal to further decrease the VAT for certain categories of farm products. High on the Government’s agenda, are, according to Prime Minister Ponta, the projects related to European funds, the transport infrastructure, the judiciary, education, agriculture and the environment.


    JINGLE


    Romania’s 2015 budget, on Parliament’s agenda


    The budget bill and the social security bill for 2015 have been for a whole week on the agenda of the Bucharest Parliament, after being passed by the country’s legislative body last Friday. According to PM Ponta, the 2015 budget does not provide for any increase in taxes and duties. The new budget has taken into account a 2.5% economic growth, an annual inflation rate of 2.2% and a budget deficit of 1.8%.



    The Government’s emergency ordinance, sanctioning political party switching, declared unlawful by the Constitutional Court


    The Constitutional Court of Romania has ruled that the law by means of which Parliament adopted the Government’s emergency ordinance, sanctioning political party switching, goes against the Constitution. Adopted last year in September, the ordinance allowed numerous local officials to change parties, seeking personal interests. At present the situation of those officials who switched parties in the 45 days when the law was effective is till unclear. The Opposition believes the ordinance has encouraged political party switching, particularly in the context of November’s presidential election.



    Romania marks 25 years since the 1989 anti-communist revolution


    Romanians have commemorated 25 years since the anti-communist revolution of 1989. Timisoara is the city where the Romanian Revolution started, on December 16 that year. The protest movement spread throughout the country and the revolutionary movement culminated with the fall of Ceausescu’s regime on December 22. Over 1000 people died in Bucharest, Timisoara and several other cities. The events of December 1989 were evoked in the capital city Bucharest, in a special session of Parliament.



    The helicopter crash in eastern Romania rekindled the debate on the effectiveness of the emergency intervention system.


    The helicopter crash in southeastern Romania, which killed four people, has raised new doubts regarding the activity of the Inspectorate for Emergency Situations. A helicopter of the Mobile Emergency Service for Resuscitation and Extrication (SMURD) crashed in Siutghiol Lake, northern Constanta, merely 500 meters from the bank. At the time of the crash the helicopter was on its way back from a medical mission. Doubts emerged over rescue operations, which were carried out with great difficulty and delay. None of the people onboard was saved. Military prosecutors have launched a criminal investigation for second-degree murder. The head of the Constanta County Inspectorate for Emergency Situations was sacked, while the Constanta County prefect was also relieved of his duties. The Government believes the Department for Interventions in Emergency Situations needs to undergo an external audit regarding the training level of people in the system and the procedures involved in such cases.



    Traian Basescu attended his last European Council summit as president of Romania


    Romania’s president Traian Basescu attended the last meeting of the European Council during his current tenure. EU leaders decided to set up the European Fund for Strategic Investments, based on contributions from Member States worth 315 billion euros. Regarding the developments in Ukraine, heads of state and Government decided to continue their support for the reform process in this country. At the same time, the acting president of the European Council Donald Tusk of Poland pointed out that Brussels needs a long-term strategy on Russia. European leaders did not agree on additional sanctions on Moscow, a country currently undergoing a severe financial slump. Instead the EU adopted a new series of measures regarding Crimea, in order to highlight Europe’s opposition towards the “illegal annexation” of the peninsula by the Russian Federation.