Romania's new govt dreams of longevity

By bne IntelliNews May 24, 2012

Bogdan Preda in Bucharest -

It would be foolish to think that the new Romanian government which took office in early May via a no-confidence vote that toppled the previous one is destined to survive after the November elections. Yet the new prime minister, Victor Ponta, who heads the former opposition party the Social Democrats which has established a political alliance with the National Liberal Party to create today's Social-Liberal Union, is already acting as though there will be no major power shifts for the next four plus years, and his government looks set to govern for years to come.

The ruling coalition now behaves as if legislative elections slated for November in fact already took place at the end of April, when it managed to snatch enough votes in parliament to overthrow the 78-day-old cabinet of Mihai-Razvan Ungureanu, whom the then ruling Democratic Liberal Party had previously appointed in an image effort to improve their public image before November's elections. As nearly all surveys were showing in April that the governing coalition led by the Democratic Liberals had became wildly unpopular, Ponta and his allies took advantage of the fact that many MPs from that coalition feared they wouldn't be re-elected and promised them support in exchange for votes.

However, the no-confidence vote that happened in parliament at the end of April, a pre-electoral bargaining episode, will not necessarily reflect the way Romanians will vote in November. For one thing, as Romanians are overwhelmingly disappointed with the performance of most governments in the past 20 years, the turnout will likely be lower than ever. Hence, the Social-Liberal alliance will most likely attempt to focus their electoral messages on those voters they know always show up: the retirees and the rural population. Indeed, there is no better choice.

Hurdles and slip-ups

The biggest mistake that the governing alliance could make before the November elections would be that of acting as if it has the right to remain in power. Such an attitude will surely prompt it to make mistakes, which it has already started to do.

In an attempt to secure command of Romania's regions in preparation for the November elections, the second day after he became PM Ponta called for the resignation of all the prefects and sub-prefects in all 42 counties, saying they were serving the political and economic interests of the Democratic Liberals. The call was made despite the fact these prefects are at least formally protected by law, as well most of them having been appointed in 2006, when his alliance's co-founders, the National Liberals, were in power.

Such an aggressive action by Ponta immediately prompted eight of Romania's most prominent NGOs on May 16 to issue an "Alert from the Romanian Civil Society," which accused Ponta of "Fidesz-ization" - a reference to neighbouring Hungary's anti-democratic slide under PM Victor Orban and his Fidesz party. "The danger is visible that the new Prime Minister Victor Ponta may step in the footprints of his Hungarian counterpart, Viktor Orban, by purging the administration and the public media of independent professionals and critical voices, and engineering a super-majority in the next Parliament," the statement said.

In an eerie echo of the resignation of Hungary's president in April, Ponta in May had to let go his newly-appointed education minister, Ioan Mang, after he was accused by researchers from Japan, Israel and Taiwan of copying their academic work on IT in several of his papers as a faculty member at the University of Oradea.

Trying to score points with the electorate, Ponta said he would change Romania's taxation system as of next year from the current flat 16% income tax to a progressive one of 8%, 12% and 16%. Ponta also promised to lower the cost of employers for hiring new workers by 5 percentage points, while cutting VAT from 24% to 9% for agricultural products.

The problem with such announcements is that although Ponta stated such cuts would surely work following public budget simulations by his team, he didn't say where exactly he would garner the difference of money so that he can produce enough income to keep the budget deficit in check. As such, worries are already growing that Ponta's government could resort to raising income taxes even higher once his party becomes sure about staying in power after November elections.

Possible surprises

Another factor that could change the political landscape before the November elections would be how the Social Democrats and National Liberals work together. While one of them is a centre-left party and the other a centre-right party, they formed an alliance mainly against the Democratic Liberals and President Traian Basescu, who supported the previous governments. Indeed, the National Liberals governed together with the Democratic Liberals until 2007, and could jump ship if they get the sense they are second-class members in the current alliance.

President Basescu's role should also not be underestimated. Despite the fact that quite a number of independent commentators see his importance diminishing once the party he protected lost power, Basescu's capacity to retaliate and make new political arrangements should not be discounted, especially given his last term of office will end in 2013, so he has nothing much left to lose. Allowing his loathed political opponents to cling to power is clearly irksome to Basescu, so he is expected by many to engage in political manoeuvring as the elections near. One such game could be gathering the less tainted of the Democratic Liberals and persuade the National Liberals to play ball again.

All of this suggests that it's business as usual in Romania, where the politicians spend most of their time politicking instead of addressing the serious economic challenges needed to pull the country out of poverty, boost foreign investment and bring home more of the EU's funds that are available to it.

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