Political solidarity and taxes

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“Asked if the introduction of the solidarity tax has been discussed again and what the conclusion is, the Head of Government said: ‘The conclusion, today, is that we can file it under discussed and forgotten.’ The Head of the PSD-ALDE Government explained the change of mind through the fact that the measure would have had ‘little’ effect and would have generated great ‘trouble.’” – 25 July 2017

“The Finances’ surprise for 2018: 2 percent solidarity tax payable by employers. Minister Ionut Misa: ‘There is a European directive that obligates us.’” – 18 October 2017

I’m simply astounded by the coherence, seriousness and efficiency exhibited by the Mihai Tudose Government, isn’t it?

In just four months’ time, the incumbent Government has pulled off a national performance which I think could be included on the Book of World Records list – that of making a real show of magic and illusion out of a governance platform. And only that!

The discussion, burial and disinterment of the Solidarity Tax is just one of the many examples of this type from the ruling power’s governance model.

The things discussed today and debated at national level as vital topics for the Romanian state, whether they are of economical, fiscal, educational, or healthcare nature, the Tudose Government will most likely announce tomorrow that they are in the simulation stage, filed under “discussed and forgotten,” abandoned, revised and resumed in an eternal and mind-boggling marathon of debates and political statements.

Between two batches of government reshuffle, a monster-scandal between the PSD President and the incumbent Prime Minister, a reconciliation full of camaraderie, a fight for the defence of rule of law principles and of the principles of democracy waged within Parliament by another Social Democratic minister with legal problems of a criminal nature, and many other such exceptionally important preoccupations that the current ruling party has, Romania and Romanians in particular are trying to recover their senses and to understand where we are all heading to, toward what present and especially what future.

I do not have expertise in the economic or fiscal field so as to comment on such a tax and its effects on the Romanian economy, however, from what I have understood so far from the alarmed comments of specialists in this field, the first sector that is directly concerned and overburdened in the case of this (yet another!) unfortunate and demolishing initiative on the part of the current Government is that of the business environment and entrepreneurship in Romania. Something that is more than clear and easy to deduce and which was, in fact, mentioned by Prime Minister Mihai Tudose himself this summer, when he announced, in a sly and relaxed manner, that the measure would have had “little” effect and would have caused a lot of “trouble.”

If the trouble generated by this yet another Social Democratic gimmick was great this summer, how great will the disaster be starting on January 2018, when this tax will start making its effects felt on the Romanians’ budget, alongside numerous other draft taxes and fees that can be (re)animated and implemented in the same manner, overnight? Such as, for instance, the household tax, the split VAT or who knows what other bill and government initiative coming from another member of the Tudose Government who lost their way from their team and suddenly comes up with who knows what other fantastic idea with which they can rake in more budget revenues.

I said another “lost” minister because – I do not know how come – each time we are talking about another such enormity coming from one of the ministers of the current Government, Prime Minister Mihai Tudose and Liviu Dragnea permanently express shock with and absolute aloofness from the ministerial initiatives of their party and Government colleagues.

Thus, it seems that the Premier found out from the press about Minister Ionut Misa’s initiative to reintroduce the Solidarity Tax, and not at all directly. Namely not directly from the minister concerned or during the weekly Government meetings, as it would have been as normal as possible and I believe it is too.

This selective political autism that the PSD leaders are showing is not at the first expression of its kind and I do not expect it to be the last one either.

But there might be an explanation in the following statement made by Premier Tudose on Minister Ionut Misa’s amazing feat: “I’m trying to speak Romanian, not in a finance way like Mr Misu. In essence, from a technical point of view, he explained it well, the translation is the shortcoming for him.”

Leaving aside the humorous and not at all happy aspect of the problem we are talking about, what preoccupies me in particular, as I believe it preoccupies anyone who lives in Romania and is also a good and fair taxpayer, someone who expects Romania would one day be among the civilised and democratic countries of Europe, is the way the PSD and the entire incumbent governmental team see fit to use the eternal political fad of the “European directives.”

Irrespective of whether they actually regulate a Romanian legislative and governmental initiative, in order to take some chestnuts out of the fire and to throw them in the courtyard of Romanians under the title of “national obligation,” as a sign of falling in line with European democratic policies and for the so-called proper functioning of the Romanian state and the welfare of its citizens, PSD has gotten used to using this term in a selective way, as political shield and counterargument.

Not seldom, in the year that has passed since PSD took over power in Romania, and even before that moment, back when Victor Ponta was facing the same national problems and dilemmas concerning the USL Government, Europe, its leaders and its working mechanisms have been taxed by the left wing’s leaders in extremely virulent, incisive speeches with strong pseudo-patriotic and populist hues.

As it were, when the situation suits it, the Romanian political Left gladly joins the great European family and its democratic principles. However, when Europe expresses its obvious and profound discontent with the way the current ruling power sees fit to rule the Romanian state and to impose its governance initiatives and people within Romanian state structures, the PSD-ALDE ruling coalition automatically draws the sword and transfers the whole responsibility for various governance measures and errors on the shoulders of the same Europe that suddenly became hostile.

And this whole story is worrisome even more so since, starting on 1 January 2019, Romania will hold for six months the presidency of the Council of the European Union.

What could this moment mean for today’s Romania and how are we ready – or not – to show up, less than two years from now, at the helm of the most important modern European political structure?

This is yet another topic that is hot, problematic and extremely difficult to forecast from the standpoint of the way in which things are currently going in the Romanian state and especially within the ruling political class.

A state’s political stability is mirrored in the way it can manage and guarantee not only that internal political, economic and social balance but especially the rapports it can have with other states of the world.

An issue in fact mentioned by U.S. Ambassador to Romania Mr Hans Klemm: “The best thing Romania can do to encourage companies to form partnerships and do business in Romania is to ensure an investment environment, a welcoming and favourable business environment that is transparent, predictable, stable, that includes consultations with all actors involved, including with the members of the foreign business community.”

But, from what can be seen, this political stability that should exist in Romania, for some time now, is completely absent.

So then, how will Romania be able to manage the sensitive problem of magnitude that is Brexit?

How will the Romanian Government and the ruling power that sits at the helm of the country be able to convince Europe and its entire political elite – with which they will be in direct and continuous contact – that we have a country capable and ready to hold dialogues and to regulate problems that have to do with the whole European legislative construct, with the whole continental agenda, with negotiations at the highest possible level, with another round of European Parliament elections and elections for the leadership of the European Commission, with the future EU budget for the 2020-2024 financial framework, issues that concern an entire Europe and world, with people such as Ms Rovana Plumb or Sevil Shhaideh, Mr Minister Liviu Pop and Mr Minister Ionut Misa?

Not to mention that 2019 is another elections year in Romania. The presidential elections.

For Romania, 2019 is a crucial year.

It is the year in which the entire political class of the last 28 years will pass or fail the test of democratic maturity and of real and undissimulated solidarity with Romania and with Europe.