Outgoing Romanian government hopes to chart development path

Outgoing Romanian government hopes to chart development path
Two centre-right parties have already said they will support Prime Minister Dacian Ciolos for a second term.
By Clare Nuttall in Bucharest November 4, 2016

As general elections approach in Romania, two centre-right parties have already said they will support technocratic Prime Minister Dacian Ciolos for a second term, hoping to continue the work of his government after its one-year term expires. Whatever happens on December 11, the government hopes to influence the country’s development long after its short mandate is over, and has been drawing up long-term strategies for the country.

October 30 marked the one-year anniversary of the Club Colectiv nightclub fire in Bucharest, a tragedy that eventually claimed the lives of 64 young people, many of whom died of infections in Romania’s under-funded hospitals. A silent procession of around 5,000 people marched to the site of the fire, with many of those present carrying candles or photographs of the victims.

The fire was seen as a tragic consequence of corruption; the club’s owners did not have the permits needed to hold an indoor firework display and the venue was packed beyond its capacity. It triggered mass protests in November 2015, with over 25,000 people turning out to demand the resignation of Romania’s then Prime Minister Victor Ponta and other officials.

The appointment of Ciolos and his cabinet of technocrats was broadly welcomed in Romania, seen as a change from the succession of corrupt party political governments. There were high hopes of Ciolos, a former agronomist who had previously served first as Romania’s agriculture minister and more recently as European commissioner for agriculture.

There was a certain amount of disappointment in Romania when it became clear that the amount the government would be able to achieve in its one year in power would be very limited, despite its ambitions.

“What we are planning would be more suitable for 10 years, not for the one year we have in government, as we realised at the end of our mandate,” Minister of Labour, Family and Social Protection Dragos Pislaru commented at the Foreign Investors Summit 2016 in Bucharest on November 1.

“This government has not been a perfect government; we have struggled,” he added, while pointing to achievements such as fighting corruption through the creation of a registry for officials to record all meetings with private stakeholders, and building relations with Romania’s large diaspora.

The government has also often been at odds with the agendas of elected politicians with an eye on their chances in the December 11. Recent weeks have seen a concerted push by MPs from the Social Democratic Party (PSD) and its ally the Alliance of Liberals and Democrats (ALDE) for higher public sector wages and tax breaks, despite warnings from Ciolos and the central bank that Romania risks pushing up the budget deficit and squandering any gains from the current rapid economic growth through its expansionary fiscal policies.

While the government’s ability to force through reforms is limited, this has not stopped it from drawing up ambitious plans for the future.

Romania 100

On October 17, Ciolos unveiled his government’s wide-reaching Romania 100 platform, a vision for the country based on 10 principles starting with a “Romania without corruption”. Others include a responsible political class, education, rising living standards and a competitive economy.

“Following the December 11 elections, Romania will risk having its first lines ruled by people who are being criminally investigated, with criminal sentences, who can no longer represent the future,” Ciolos commented at the launch of the platform - a clear dig at the PSD’s leadership.

In addition to Ponta, who has been charged with multiple counts of forgery, money-laundering and complicity to evade taxes, the party’s president Liviu Dragnea was found guilty of voter manipulation in the 2012 referendum. This has left the PSD unclear who it would appoint as prime minister should it win the election, especially as President Klaus Iohannis has said he will not nominate anyone facing criminal charges for the post.

Earlier this year, Ciolos, Iohannis and central bank governor Mugar Isarescu launched the Competitive Romania country project. The aim is to grow the economy by an average of 5% per year until 2020, thereby boosting GDP per capita to 70% of the EU average, from the current 57%. It aims to address 41 priorities across 16 sectors of the economy (since raised to 17), and will cost the Romanian budget €16.9bn. 

Aside from that, the initial Competitive Romania announcement was light on details - it was followed by three months of consultations and more information is expected to be given soon - but it appears to be intended as the kind of medium-term development strategy the country has lacked so far. As one analyst told bne IntelliNews earlier this year, Romania’s “chaotic” development so far has resulted in growing regional disparities ultimately holding back overall growth.

“Romania now needs a new model of economic development. We all know that in Romania there have been strategies of all kinds but many remained on paper in various drawers, usually in the government,” Iohannis said on presenting the document.

Government officials say more details are imminent, and even though the elections are fast approaching, speaking to bne Intellinews on the sidelines of the Foreign Investors Summit 2016, Pislaru said it would still go ahead even if there is a change of government post-election.

“President Klaus Iohannis has started a fully fledged process for the country strategy. He is going to take Competitive Romania and his own initiative Educated Romania, and bring all these elements together. The debates will culminate in 2018, Romania’s centenary … we will have a strategy by 2018,” Pislaru said. “Whatever happens in the election this process will continue.” He also noted there was “much alignment” between Competitive Romania and the Romania 100 platform.

With the election now just five weeks ahead, the technocratic government’s term is drawing to a close, but there are hopes both among its ministers and Romania’s main centre-right parties that its policies will continue post-election.

Currently the indications are that new PSD-led government is most likely; the PSD and ALDE are expected to take a combined 52% of the vote according to a recent poll by Kantar-TNS. However, the National Liberal Party (PNL) and the newly formed Union Save Romania (USR) are still hopeful that by backing Ciolos for a new term they can rally support among the population.