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May 26, 2022

A consistent Government’s lack of unity

The new Emil Boc Government is not a monochrome one consisting of PDL and UDMR and supported in Parliament by the group of “independent MPs” headed by Gabriel Oprea, “independent” who was to become defense minister. It is however a consistent Government, moulded around joint interests and determined by Traian Basescu’s victory during presidential elections. But the current Cabinet is not an exemption to the syndrome of “the left is unaware of what the right does.” In the previous coalition governments, the “phenomenon” was explained through the fact that ministers affiliated to a party were not very willing to answer orders coming from another party’s premier. Or, in the case of state secretaries, from another coalition party’s minister. But, a government heralded as a consistent one and without interior tensions (how UDMR leader Marko Bela or PDL leader Emil Boc qualified it) makes sheer proof of lack of unity. As for the ideological “puzzles” which make it up, they don’t fell very much at ease either in an ensemble accused of being crony- inclined.

Some ministers’ recent statements throw more wood on fire and subsequently made PM Emil Boc threaten to reshuffle them. But the evil and the negative impressions are already there. The impression that in the present Cabinet the ministers have too many ideas they want to enforce and initiatives that are in no way connected to the Government’s recent policy. Obviously, Premier Boc denies the programme of his Cabinet includes (or it was discussed to include) taxes on pensions under RON 1,000, or to cancel the allowances for the children from well-to-do families. “These are the Government’s internal problems,” PM Boc tells us. But in this way we stumble upon even more inadvertencies between stands expressed by the governmental officials.

First, there was the health minister, Cseke Attila, who brought under public debate the fast-food tax, an endless discussion which tends to turn not only the fast-food products but also a long list of ordinary food products into luxury products for the Romanians. In this case there were also contradictory declarations, pros and cons being brought up. At the end of the past week, labour minister Mihai Seitan came with the idea to restrain the allowances for the children coming from well-to-do families. The opposition winced as if lashed. The same did the associations of parents and the human right defence organisations, the children being discriminated through this possible law. The initiative was officially denied, but a state secretary in the Labour Ministry declared on the public TV channel they are working on such a draft law.

Finally, a few days ago, in an interview for a central daily, the finance minister Sebastian Vladescu was stating that all revenues should be taxed, hinting (explicitly) that all the pensions should be taxed. Presently, the pensions above RON 1,000 (around EUR 240) are taxed 16 per cent. Does it mean that the pensions below this threshold will also be taxed? This time, the opposition reacted toughly (PSD even threatened with a censure motion) the same as the public opinion in general. A cynical joke was suggesting the Government how to get rid more quickly of the pensioners: “Better try with cyanide.” I read the respective interview. The TV channels played even the footage with the recording. However, minister Vladescu states that the media has “speculated” on this issue. “The Public Finance Ministry does not intend to take any measure for the taxation of the pensions, nor will it launch a public debate on this issue,” declared the minister even after the media disclosed that Premier had warned the above mentioned ministers that they can be changed if they continue to make declarations outside the governmental programme. “There are no threats in the Government,” Sebastian Vladescu said.

About how consistent is Boc Govrnment and the alliance which makes it up is eloquent the declaration of the Speaker of the Chamber of Deputies Roberta Anastase. “It is the attribution of Prime Minister to manage his communication policy and, if you allow me a purely personal appreciation, it is an absolutely correct decision. In the moment when you speak about a non-discussed thing, about a personal opinion, you don’t do it in your official capacity,” Anastase said referring to the assertions of the finance and labour ministers.

The stumble does not end here. Premier Boc steadily speaks about consistent budgetary savings by canceling special pensions, while the labor minister argues the amounts to be obtained are much smaller. It is difficult to fight the crisis under these circumstances.

The arrival of a new tranche from IMF rescues the Executive for some small time span, there will be money for salaries and pensions for several months. What is next ? It is clear all these “inadvertences” are determined by financial “draught” of the state budget, by funding needs. The Finance Ministry goes on the internal market to sell bonds on a weekly basis. In February alone its intention was to collect RON 3 bln. Internal market banks have already given us loans of over one million Euros, and the intention is to go on the international capital markets for new loans. How far shall we go at this pace?

Since the measures of the Executive against the crisis “are sublime but they are perfectly absent,” it appears that each minister tries to show off in his domain through some measures able to bring more money to the budget. But publicly PM Boc cannot afford – for reasons of popularity – to endorse such initiatives. Wherefrom also the appearance of decisional downfall. Should we also add here that there are increasingly insistent rumours regarding an impending increase of the VAT? These are only rumours, Premier would probably say.

But, all in all, the real economic stimulation measures are missing. In exchange the story goes increasingly about other taxes which, regardless of their variant, will be still borne by the citizen.

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