The Week in Review, July 26 – August 1
A review of the main developments in Romania over the past week.
Newsroom, 02.08.2015, 12:20
The Parliament in Bucharest will meet in late August in an extraordinary session to debate changes proposed by President Klaus Iohannis to the new Fiscal Code. On 17 July, the head of state refused to sign the bill into law and sent it back to Parliament because he believed it would cause economic imbalance. Interim Social Democratic Party Chairman Liviu Dragnea said he did not believe changes were necessary, but that the Ministry of Finance would run an additional analysis on the budget impact of cuts in taxes, which should convince both the presidency and the central bank that reducing taxes was sustainable. In turn, the Liberal opposition announced that it wants a technical debate on the law before the vote in Parliament. Liberal co-chairman Alina Gorghiu said that the Liberals would vote the law in a form that supports fiscal relaxation measures. The National Bank Governor Mugur Isarescu pointed out that the main tax cuts, such as reducing the VAT and social insurance contributions in 2016, eliminating or reducing other taxes that bring in important contributions to the budget, would be inapplicable because of their impact on the GDP. Isarescu claims that the new Fiscal Code would put a 2.3% dent in the gross domestic product.
The government issued its first budget adjustment for this year, distributing the supplementary income gathered in the first half of the year. According to the authorities, 4 billion lei were collected, benefiting mostly the Ministry of Labor. The surprise this year was the fact that major funding was cut from the Ministry of Transportation, which manages major infrastructure investments, while the social protection side, represented by the Ministry of Labor, receives the highest funding, in order to pay increased amounts for social assistance to children and retirees, among other things. The ministries of finance, defense, interior, education, environment, and agriculture, and the intelligence services also got more money. The opposition criticized the government for the way in which it has distributed the money in this executive order. The liberals are accusing the government that it has allocated the money on pork barrel principles, giving it to local administrations led by Social Democrats. They also claim that PM Victor Ponta tries to garner support from the Social Democratic leadership. This draft order includes salary boosts to high order dignitaries, applicable starting August 1st.
The presidency in Bucharest, alongside the Ministry of Foreign Affairs, have saluted the new government in the Republic of Moldova, led by Liberal Democrat Valeriu Strelet. President Klaus Iohannis said, quote: “Our partners should be convinced that they would have in Romania the most support in overcoming economic difficulties and in continuing on their pro-European road. The new executive in Chisinau is supported in Parliament by the three pro-European parties, the Liberal Democrat, Democrat and Liberal. The new cabinet mentions among its priorities a new anti-corruption strategy, as well as inviting a mission of EU experts to assist the authorities in Chisinau in reforming the judicial system. In foreign relations, the government wants to pursue European integration and improving foreign relations.
Romanian football side Astra Giurgiu tied on Thursday in an away game, 2-all, with West Ham United in the first leg of the third preliminary round of the Europa League. In the same stage of the competition, another Romanian side, ASA Tg. Mures, lost at home 0-3 against the French team AS Saint-Etienne. On Wednesday, Romanian champions Steaua Bucharest tied 1-all at home against Serbian side Partizan Belgrade in the first leg of preliminary round three of the Champions League. The second leg games are scheduled for next week.
An extreme heat wave has swept over Romania these last few days. The heat index was very high, over 80, with temperatures reaching 40 degrees centigrade in places. Southern and eastern counties have been hit by severe drought, which has dried up water wells. The Danubes level has reached a record low, with the most important crops, such as wheat, corn and sunflower, being severely affected. Experts warn that unless sufficient rain comes over the next few days, crops would be compromised, causing severe financial losses.
Romanian writer Mircea Cartarescu was awarded the Austrian state award for lifetime achievement at the Salzburg European literature festival. This was announced as early as this April. Mircea Cartarescu is the first Romanian to win this prize since 1970, when Eugene Ionesco was granted this prize, which has been given since 1965. Among past winners are Vaclav Havel, Salman Rushdie and Umberto Eco.
