What exactly is Romania's PM playing at?

By bne IntelliNews July 13, 2012

Andrew MacDowall in Belgrade -

A freshly-appointed prime minister presiding over a country in dire economic straits much in need of international good will: this is the situation in which Romania's Victor Ponta found himself when he took office in early May. And yet the fresh-faced premier, rather than setting about the country's many issues and preparing for an expected landslide election victory in autumn, has plunged the country into political crisis to a chorus of condemnation.

EU officials are apparently "flabbergasted" at Ponta's actions, according to a recent report in The Economist. Why would a leader, backed with public goodwill and with much to do, set about attacking his beleaguered and discredited president, and taking to task several of the key institutions of state? Some see the hand of tycoon Dan Voiculescu, one of Romania's richest men, at work.

It's worth summarising what the Social-Liberal Ponta government has done in its brief time in power. It has passed the suspension of President Traian Basescu pending an impeachment referendum, now due on July 29. It has changed the law to prevent the Constitutional Court overruling parliament. It has attempted to undermine some of the court's members, who by law must serve out their terms without threat of expulsion. It has replaced the ombudsman, a check on parliamentary power, with an ex-party hack. It has issued 40 emergency decrees in two months. Perhaps most farcically, it has attempted to disband an academic committee that found Ponta guilty of plagiarising much of his PhD thesis.

Ponta came to power in early May after the collapse of a pro-Basescu government in a vote of confidence the previous month. The parties backing him swept the board in local elections on June 10, and similar results were expected for the legislative election due by late November, which would have given the PM a strong mandate for change. The pro-Basescu opposition is terribly weak, due to the unpopularity of its swingeing austerity measures imposed at the International Monetary Fund's (IMF) behest, as well as the perception that it and its strongman president are out of touch and have done little to tackle corruption and boost incomes. Basescu's approval ratings hover in the low double figures.

One of Ponta's first jobs was to seal a continuation of the IMF standby agreement, with pledges for continued medium-term fiscal retrenchment. This the government achieved, but since then it has all gone rather wrong.

Captain not-so invincible

European Commission, German Chancellor Angela Merkel and US diplomats have all issued condemnations or at least notes of "concern" about the situation, including the impeachment of Basescu. Ponta has come out fighting, saying that he is determined to uphold the constitution and European values, but that Basescu was interfering with the government's attempts to get the country back on its feet. In a reference to Basescu's past as a sea captain, on July 12 he said: "I did my best to co-habit. He has acted against the government and against parliament... I understand that on a ship there is only one captain, but Romania is not a ship."

There is no doubt that the pugnacious Basescu can be obstructive. He has seen off those who defied him in the past, most notably the Liberal Calin Popescu-Tariceanu, PM between 2004-2008, a former ally whose relationship with Basescu quickly soured (Tariceanu's government attempted to impeach Basescu by a referendum in 2006: the president won). More recently, he has preferred to rule through more pliable premiers. Basescu is abrasive, and accusations that he has pursued anti-corruption efforts largely against his enemies are not without substance. And Ponta's advocates argue that he has put placemen in key positions in the Constitutional Court and other supposedly independent institutions in order to entrench his power.

Nonetheless, many analysts smell a rat. Professor Tom Gallagher, a British Romania-watcher, suggested in an article on The Commentator that tycoon Dan Voiculescu, one of Romania's richest men, a media tycoon and an eminence grise in Romanian politics for more than two decades, is behind the government's actions. The stand-in president (and candidate to replace Basescu), Crin Antonescu, is a Voiculescu protégé. On May 1, Vociulescu said that Basescu should be impeached if he didn't resign within 60 days; in the end, the suspension came after 59 days.

According to Gallagher, "after 1989, [Voiculescu] had acquired enough money to launch a media empire which he placed at the service of whichever party was most actively opposed to genuine change in Romania. This was usually the heirs of the Communists, the Social Democratic party [of which Ponta is leader]."

Voiculescu, as well as being a proven Communist-era informer, also allegedly did rather well out of privatisations in the 1990s under the post-Communist successor governments.

Romanian journalist Dan Tapalaga concurs with Gallagher, and points out that Voiculescu was coming to the end of a trial for corruption (specifically involving underpriced land) - a trial that could be cancelled if Ponta is successful in displacing Basescu and replacing prosecutors at the National Anti-corruption Directorate (DNA), an organisation that has been praised by the EU for its efforts. "The origin of what is happening lies in Voiculescu and his interests," Tapalaga tells bne.

But he is not the only figure who stood to lose if Basescu's targeted anti-corruption efforts continued. Several of Ponta's deputies face investigation - and the recent conviction of ex-Prime Minister Adrian Nastase and other senior figures indicates that the DNA is willing to go to the top. "After Nastase was convicted, people started getting scared," says Tapalaga. "So the likes of Voiculescu decided to do something about the last institutions to oppose abuses of power. Half of Ponta's support comes from allies of Voiculescu and people with interests to defend. He is their prisoner."

The history of anti-corruption efforts in Central and Eastern Europe has all too often been one of score-settling between opposing political sides that actually differ little in policy. Despite cases like Nastase's, public perception of corruption changed little under Basescu. Nonetheless, the current assault on Romanian institutions looks like a dangerous step back for a beleaguered country.

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