Weekly Policy and Political Report
March 28 – April 4, 2016
ISSUE MONITORING
A document prepared by:
The Center for Monitoring Public Policy
Content
Week in review ............................................................................................................................................ 3
Week’s policy headlines .............................................................................................................................. 4
PM Ciolos announces Government debate on wages bill ........................................................................ 4
IntMin Toba: We count on gendarmes to counteract migration phenomenon ..................................... 4
Permanent Electoral Authority provides details on Electoral Register to Romanians living abroad 4
President Iohannis announces consultations with parties on security legislation ................................. 5
Week’s business environment headlines ................................................................................................... 5
National Bank of Romania decides to maintain monetary policy rate at 1.75pct per annum ............. 5
National Prognosis Commission: Women contribute 41-43pct to Romania's GDP ............................. 5
Share of budget revenues in GDP up by 0.5pct in 2015, National Agency for Fiscal Administration
report says.................................................................................................................................................... 6
BNR forex reserves up 457 million euro in March .................................................................................. 6
Week’s political headlines .......................................................................................................................... 6
CURS poll: 38 pct of Bucharesters disagree with President Iohannis' way of leading Romania ........ 7
Alina Gorghiu invites PM Dacian Ciolos to join PNL ............................................................................. 7
PNL, UNPR, PSD possible consensus on sacking Senate Speaker Tariceanu ....................................... 7
First government reshuffle might take place ............................................................................................ 7
Week in review
Political developments over the past week are prolonging into this week as well. As the
National Liberals initiated the process of sacking Senate Speaker Calin Popescu Tăriceanu, the
latter’s party (ALDE) submitted a simple motion against the Government. At this point, it appears
that the entire situation revolves around the political support for the members of the Cabinet. In
this sense PNL has officially asked PM Dacian Cioloș to join the party at the end of his term,
invitation so far unanswered by Cioloș. On the other hand, and therefore answering to the simple
motion against JusMin Raluca Prună a couple of Ministers have been rumored to be sacked after
Easter.
Considering the dispute between the leadership of the PNL and ALDE on the Cabinet,
respectively on the position of Senate Speaker, it is likely that a compromise will be reached
through a Government reshuffle. So far the candidates for the possible reshuffle, besides Raluca
Prună are the Minister of Agriculture Achim Irimescu, and the Minister of Health Patriciu Achimaș
Cadariu. However, considering that legislative term is close to its end, these changes can be
considered as part of the electoral battle and the most certain outcome would be a rearrangement
of the current political alliances.
In this sense, PNL have announced on Monday (April 4) that they are postponing their
efforts of replacing Tăriceanu, as they are still raising votes from UNPR. Currently in between
PNL and PSD, and under a new leadership, UNPR has to decide between the two competing
parties. In this case, UNPR’s vote in the case of the Senate Speaker may represent the point of no
return in the electoral alliance with the Social Democrats. As recent events have proven, UNPR
has distanced from the Social Democrats, and an electoral alliance with the National Liberal may
be of little surprise.
In terms of policy, the Government announced that the draft bill on unitary wages is to be
debated on this week’s sitting. Taking into account EC’s warnings on the budgetary deficit, the
Government may accept higher wages for civil servants at the expense of the minimum wage being
frozen until 2020 to a maximum of RON 1350. This option was presented as a solution for avoiding
a moment similar to that of 2010, yet the unions have severely criticized the proposition given that
the minimum wage will have been advancing by an insignificant amount in the next four years.
The past week has exposed the members of the Cabinet to serious attacks after some
ministers have released controversial statements, and a possible government reshuffling is to be
expected. However, at this point the major questions are if Călin Popescu Tăriceanu will be sacked
from the position of Senate Speaker, and if UNPR will close a deal with PNL.
Week’s policy headlines
PM Ciolos announces Government debate on wages bill
The Government will discuss in its Wednesday's sitting a draft law on public employees'
wages, Prime Minister Dacian Cioloș announced on Monday; he mentioned two working versions
of this bill. The premier explained the delay in the presentation of this bill by the unrealistic
approach of the previous government, in terms of budget resources. "That project's ambition was
way beyond the budget can support over the next years, until 2020. (...) I wouldn't want us to come
up with a draft law, adopt it, and then see it share the fate of the 2010 bill, which (...) was not
implemented," he said. According to Ciolos, any relevant legislative proposal will aim at
increasing the wages for some categories of public employees, precisely to provide a new balance.
IntMin Toba: We count on gendarmes to counteract migration phenomenon
Interior Minister Petre Toba underscores in a message sent on the Day of the Romanian
Gendarmerie that the migration phenomenon, the radicalization trends and the aggravation of the
terrorist risk are new challenges on an external level, which must be counteracted, mentioning in
context the support of gendarmes. "On a domestic level, we are facing a loaded period, because
this year, besides the daily missions, we have to manage two election periods, with their specific
issues regarding the public events and manifestations. On an external level, we are faced with new
challenges, such as the migration phenomenon, the radicalization trends and the aggravation of the
terrorist risk, for the counteraction of which we also count on the Romanian Gendarmerie,"
Minister Toba points out in his message sent by the Interior Ministry.
Permanent Electoral Authority provides details on Electoral Register to Romanians
living abroad
The Permanent Electoral Authority (AEP) provides details regarding their enrollment in
the Electoral Register to the Romanians living or residing abroad who wish to vote in
parliamentary elections. The AEP states that enrollment in the Electoral Register is mandatory for
those who wish to vote by correspondence. Otherwise, enrollment is not mandatory and all
Romanians legally residing abroad may vote. The AEP nevertheless recommends all Romanians
abroad to enroll in the Electoral Register, because this allows them to vote in a polling station near
their residence, saving costs and travel time to polling stations at embassies, consulates and cultural
institutes.
President Iohannis announces consultations with parties on security legislation
President Klaus Iohannis announced consultations with all the political parties on security
legislation. “If politicians back in the country expect these consultations, it means they have
understood my message. I want to reassure everybody that I’ll have consultations with all the
political parties over the next weeks; we will also gather the experts who came up with some ideas
in this field, and I hope we will manage to start within the shortest delays a process of
modernization and update of the whole legislation,” Iohannis declared on Thursday in Washington
DC, where he will participate in the Nuclear Security Summit.
Week’s business environment headlines
National Bank of Romania decides to maintain monetary policy rate at 1.75pct per
annum
The Board of the National Bank of Romania (BNR) decided on Thursday to maintain the
monetary policy rate to 1.75 percent per annum as well as the existing levels of minimum reserve
requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions,
according to a statement by the BNR. The institution also decided to pursue adequate liquidity
management in the banking system. The monetary policy rate has remained unchanged since May
2015. “For now we do not have any significant change [in the monetary policy]. We will have
details in May. In the meantime, also following the discussions with international financial
institutions, a first step towards a narrowing of the interest rate corridor has been outlined. The
significance is clear: we strengthen the signal power that the key interest rate must have.
Meanwhile, until such a measure is taken, we will have to clarify, including with the public
opinion, what other significance such a narrowing has,” said Isarescu.
National Prognosis Commission: Women contribute 41-43pct to Romania's GDP
Women contribute some 41 to 43 percent to Romania's gross domestic product (GDP), the
reason being their earlier retirement, shows a survey by the National Prognosis Commission
(CNP). The assessment of the women's contribution to the gross domestic product was based on
data published by the National Institute for Statistics (INS) for 2014 and 2013 (for the GDP, in a
breakdown by institutional sectors). Three methods were used for the calculation: production,
revenues and GDP by institutional sectors. "Considering the structure by activities of the national
economy, the services sector as a whole has by far the largest contribution (51.6 percent of GDP),
yet here women account for 48 percent of the employed population. There are branches where
women account for more than 60 percent (66.3 percent in financial intermediation and insurance;
62.7 percent in public administration, education, healthcare; 60.1 percent in show business,
cultural and recreation activities), but their contribution to the formation of the GDP is around 16
percent.
Share of budget revenues in GDP up by 0.5pct in 2015, National Agency for Fiscal
Administration report says
The National Agency for Fiscal Administration (ANAF) implemented in 2015 a
modernization program, improved the collection rate by 7.8pct and the voluntary compliance stood
at 83.5pct, according to the institution's 2015 annual report. In 2015, ANAF collected 196.8 billion
lei (43.73 billion euros), 14.26 billion lei (7.8pct) more than in 2014. "The share of budget revenues
in the GDP thus reached 27.9pct, 0.5pct more than in 2014. VAT collections to the state budget
increased by 12pct compared to 2014, to 57.13 billion lei, and profit tax revenues increased by
13pct, to 12.33 billion lei," the report shows.
BNR forex reserves up 457 million euro in March
The National Bank of Romania (BNR) foreign exchange reserves stood at EUR 31,282
million at end-March 2016, up by 457 million euro, from 30,825 million euro at end-February
2016, a press release by the central bank (National Bank of Romania, BNR). In March 2016, there
were EUR 1,389 million inflows, representing changes in the foreign exchange reserve
requirements of the credit institutions, inflows into the Ministry of Public Finances’ accounts,
inflows into the European Commission’s account a.s.o. On the other hand, the bank recorded EUR
932 million outflows, representing the entering into force of the decision to cut the minimum
reserve requirement ratio on foreign currency-denominated liabilities of credit institutions,
changes in the foreign exchange reserve requirements of the credit institutions, interest and
principal payments on foreign currency public debt a.s.o.
Week’s political headlines
CURS poll: 38 pct of Bucharesters disagree with President Iohannis' way of leading
Romania
Nearly 40 percent of Bucharesters do not agree with the way in which President Klaus
Iohannis has been ruling Romania, and most of them would vote the Social Democratic Party
(PSD) if an election to the Bucharest General Council were held tomorrow, according to findings
of a CURS poll conducted March 9-18. Asked if they approve or disapprove of the way in which
Iohannis has been leading the country, 38 percent of the respondents say he has not done a good
job; 27.5 percent say he has, while 31.5 percent say they have no opinion on that and 3 percent did
not answer.
Alina Gorghiu invites PM Dacian Ciolos to join PNL
National Liberal Party (PNL) Co-President Alina Gorghiu stated that the Liberals have
invited Premier Dacian Ciolos but also other members of the Government to join PNL, however
whether they will do so or not is their option. Alina Gorghiu said she “feels” that in certain
moments Dacian Ciolos has “reservation in governmental activity,” precisely because of the lack
of political support. Gorghiu pointed out that after the parliamentary elections scheduled at the end
of the year there will be a political Government and, in case PNL wins the elections and forms the
Government, Catalin Predoiu will lead the latter, however she does not rule out the possibility that
current members of the Cabinet could be included in it.
PNL, UNPR, PSD possible consensus on sacking Senate Speaker Tariceanu
UNPR seems caught in the middle between PNL and PSD in what concerns PNL’s
announcement concerning the start of the process of revoking the Senate Speaker. UNPR President
Valeriu Steriu stated on Wednesday that UNPR will decide whether they will back the undertaking
or not. PNL Co-President Alina Gorghiu announced on Tuesday that the leaders of Liberal
Senators were tasked with starting the collection of signatures in favor of replacing the Senate
Speaker. Following the Liberals’ initiative to sack the Senate Speaker, Calin Popescu Tariceanu
stated that he is not afraid and accused PNL of being far too similar to the former PDL.
First government reshuffle might take place
PM Dacian Ciolos is allegedly ready to make the first government reshuffle. On his list of
ministers to be replaced is Health Minister Patriciu-Andrei Achimaș Cadariu, due to the way he
managed the babies’ crisis and to the poor communication in this case. Second on his list is Justice
Minister Raluca Pruna, due to the blunder regarding the emergency ordinance on wire tapping,
followed by Environment Minister Cristina Pașca Palmer. According to the source, on the reshuffle
list are included European Funds Minister Aura Raducu and Finance Minister Anca Dragu.