A review of the main developments in Romania over the past week.
The pros and cons of the new fiscal code
Romanian Prime Minister Victor Ponta said he wanted that the issue of the new Fiscal Code to be resolved by September 1st. The bill was last week sent back to Parliament for debates by the country's president Klaus Iohannis who argued that the fiscal relaxation it envisages could produce serious economic imbalances. The Prime Minister defended the bill, saying the new code, which, among other things, stipulates a series of tax cuts, particularly the VAT and which was discussed with the representatives of the business community and passed by Parliament, will keep Romania on the path to economic development. Ponta says the new fiscal code will be discussed again:
"Maybe after August 15th we'll hold a special meeting, first in the Senate, as this is the first Chamber, and then in the Chamber of Deputies. Of course we will vote in favour of the Fiscal Code and I believe it will be signed into law by September 1st so that all those who make their investment and job creation plans for 2016 should know they have something clear they can rely upon."
The president's rejection of the Fiscal Code has caused a series of divergences between the ruling coalition and the Liberal opposition, which supported the president. The Social-Democrats, number one in the government, lashed out at the National Liberal Party, the main opposition force, accusing them of petty politics, given that they initially voted in favour of the bill in Parliament. The Liberals explained that in spite of their yes vote, they have constantly voiced their doubts regarding the sustainability of the fiscal relaxation the new code envisages.
Amendments to the new election law in Romania
Romanian president Klaus Iohannis has promulgated the law on the election of senators and deputies and on the organisation and functioning of the Permanent Election Authority. The law amends the rules for the election of MPs and gives more prerogatives to the Permanent Election Authority. The new law also reintroduces the proportional representation voting system used until 2008. Under the new election law, the number of MP seats will be cut by more than 100. Thus, the number of senators and deputies will stay at maximum 466 as compared to 588 at present. The 5% threshold for parties to enter Parliament will be maintained but the new law also provides for a threshold varying between 8 and 10% in the case of electoral alliances.
After the flawed staging of the 2014 presidential elections, when many Romanians living abroad were unable to cast their ballots due to huge queues at the polling stations, the new election law has a special provision to help voters abroad: polling stations will also be set up in places where there are at least 100 Romanian registered voters. The condition is that they must have their names and addresses included in the Election Registry following a written application to the Permanent Election Authority.
The Social Democratic Party, the senior partner in the ruling coalition in Bucharest, has a new interim leader
Liviu Dragnea is the new interim leader of the Social Democratic Party, the senior member of the left-wing ruling coalition in Romania, until the next party congress in November. The decision was taken by the Social Democrats leadership body following the resignation of Victor Ponta after five years as leader of the party. Ponta, who is also Romania's prime minister, is currently under criminal investigation. The new leader said the party is united and, together with its coalition partners, the National Union for the Progress of Romania led by Gabriel Oprea and the newly-created Liberal and Democratic Alliance, would continue to support Victor Ponta's cabinet.
The Liberal opposition says the appointment of Liviu Dragnea shows that Victor Ponta has lost the political support of his party and called for his resignation as prime minister. Dragnea served as executive president of the Social Democratic Party and a development minister, but had to resign after receiving a one-year suspended sentence in the court of first instance in a case related to the 2012 referendum on the impeachment of the then president Traian Basescu.
Hans Klemm has been proposed as the new US ambassador to Romania
Proposed by president Barack Obama as the new US ambassador to Romania, Hans Klemm was heard by the US Senate Committee on Foreign Relations. Klemm pledged to consolidate ties with Bucharest and support the institutions fighting against corruption. Romania, which he described as an excellent ally and strategic partner of the United States, has a key role to play in ensuring prosperity in south-eastern Europe, said the American diplomat, who also urged Bucharest to invest in its energy infrastructure. Since the end of Mark Gittenstein's tenure as US ambassador to Bucharest in December 2012, the US embassy has been run by a charge d'affaires.
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